2022: The Year of the Record-Breaking Rental Market, Part 2

The 2022 rental market will likely sustain record-breaking conditions from the past several years as demand surges to a new high and double-digit rent growth hits a larger number of U.S. metros. In the third quarter of 2021, the vacancy rate was the lowest on record since the mid-1980s at 4.6%, down from 6.9% during the first year of the pandemic, according to Harvard University’s Joint Center for Housing Studies. 

Rental demand also broke records in the third quarter of 2021 after a reported net gain of over 600,000 occupied apartments and an increase in the number of high-income renters exiting a heated housing market. In November 2021, multifamily housing starts reached a three-decade high of 466,000 units, seasonally adjusted, and construction is likely to remain strong into 2022 as the global supply chain stabilizes and demand continues to grow.

The number of renter households increased by more than 870,000 from the start of the pandemic to the third quarter of 2021, reaching a total of 44 million according to the HVS. The increasing number of renters was especially noteworthy given that it had remained at about 43 million for the previous four years. This jump in demand was echoed in the professionally managed market. According to RealPage data, the net increase in occupied apartments was more than 600,000 in the third quarter of 2021, a record jump in demand in data that goes back to the 1990s.

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