US Apartment Rent Growth Stalls Amid Record-Breaking Supply

[Sanjeev Advani]

Amid surging demand for apartments, the US rental market is contending with the largest supply of new units in four decades. A report from Apartments.com shows that 178,000 newly constructed units entered the market in Q3, bringing the projected year-end total to 636,000 units. This influx is limiting rent growth nationwide, particularly in the Sun Belt, where oversupply has led to rent declines.

Nationwide, vacancy rates edged down to 7.8% as move-ins outpaced move-outs. However, national rent growth remains at 1.1%, with a slight 0.5% dip from Q2. Regions like Washington, D.C., Richmond, and Detroit led rent increases, while Austin and Raleigh saw year-over-year declines due to high supply. The Northeast and Midwest are expected to be less affected by the oversupply compared to the Sun Belt and luxury properties. The rest of 2024 and early 2025 will likely reveal more about how different segments of the market adapt to these unique conditions.