Study Shows Vacancy Rates Remain Low and Monthly Rent Continues to Increase
According to RubinBrown’s annual apartment statistical analysis, trends in affordable and multi-family housing remain similar to previous years. Overall, vacancy rates remain historically low, but experienced increase throughout the year.
Since 2010, the U.S. multi-family industry has experienced increased rent growth and low vacancies. Key items such as favorable demographic trends and positive job growth have propelled the multi-family industry over the past several years.
Monthly rent continues to increase driven by the need for multi-family housing. According to Fannie Mae, almost half of single family renter households (20.2 million) are cost burdened. This means more than 30% of their income is spent on rent and utilities. Over a quarter of all renters pay more than half of their household income for housing.
The National Low Income Housing Coalition reports that the gap between supply and demand for affordable and available rental units to very low-income households is 7.7 million. Unsubsidized low income housing units are under constant threat of being lost to upgrading or removal, while subsidized contracts are at risk of converting to market rate units.
Looking ahead, vacancy rates are showing signs of increasing to historical rates, but market participants view the multi-family industry only slightly less positively than in previous years and expect lending and investment conditions to remain favorable. In addition, Opportunity Zones will continue to allow investors to defer gains for an investment in primarily disadvantaged neighborhoods.
Each year, data is collected from our clients, as well as other contacts and referrals within the industry, to comprise averages in a variety of markets within the United States. The statistical information includes operational data for 2018 and represents approximately 770 apartment projects in roughly 40 states. While these averages are representative of a smaller pool of projects, the trends are usually consistent with those experienced at the national level.
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