Of 370,000 multifamily units finished from 2012 to 2014 in 54 U.S. metro areas, 82 percent were in the luxury category, The Wall Street Journal reports.
This number, gathered by real estate research firm CoStar Group Inc., suggests that the rise of luxury apartment construction is contributing greatly to rent increases across the nation.
Apartments that command rents in the top 20 percent of the market were defined as luxury. On top of that, many renters have to pay a premium to live in newly constructed apartments, with rents usually much higher than if they rented in an older building.
For example, about 95 percent of new apartments built in Atlanta from 2012 to 2014 have been in the luxury category, and renters have to pay around 40 percent more to live in a new building.