Rents nationwide increased only 3.1 percent in the first quarter, lower than the 5 percent growth from a year ago.
Realtor.com reports that the rental market has been in a slump, as rents declined or flattened in 28 of the 79 metro areas covered by Reis Inc., a commercial real estate data firm, up from 14 markets at the end of 2016. Rents stagnated in cities such as New York City, Denver, Boston, and Los Angeles.
Developers leased 100,000 new units this quarter, which helped to drop the occupancy rate to 94.5 percent from 95.1 percent at the end of the third quarter 2016.
Analysts forecasted a slowdown for the rental market coming into this year, as even red-hot places such as San Francisco had shown signs of softening.
Even tougher times might be ahead. The winter months are typically slow, but as demand is expected to pick up this spring it is likely to be overwhelmed by increasing supply. The average number of new apartments finished in each of the next few quarters is expected to climb to 102,000 from 82,000 in late 2016 and early 2017, according to Axiometrics.
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