Steady Growth in the U.S. Apartment Market
Moderation is the word across several apartment market metrics through the first half of 2016. According to MPF Research, annual rent growth slowed somewhat to 4.5%, compared to 4.9% at this time last year. This is still an impressive figure given the duration of the growth cycle, as well as the 15-year average growth rate of 2.4%. Absorption outstripped new supply and occupancy rates inched up 20 basis points to 96.2% after weakening late last year and into the first few months of 2016, exhibiting the continued resilience of apartment market fundamentals.
The recently reported homeownership rate of 62.9% (a 51-year low) from the U.S. Census Bureau bodes well for sustained robust apartment demand. Moderating market fundamentals do nothing but prolong the current cycle, which some analysts peg at 2-3 years at the minimum.
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