Bolstered by high demand from would-be single-family buyers, the multifamily market posted strong gains throughout the second quarter of 2022. As low single-family housing supply and persistently high prices in the for-sale market encouraged would-be buyers to instead turn to multifamily rentals, the absorption rate of unfurnished, unsubsidized apartments rose by 15 percentage points to 77% in Q2 2022, NAHB Eye on Housing reports.
The number of multifamily completions also rose from 52,170 in the first quarter of the year to 77,110 in Q2, though completions were down 8.6% year-over-year.
The absorption rate of unfurnished, unsubsidized apartments (the share rented out in the first three months following completion) rose by 15 percentage points to 77% in the second quarter of 2022. This is the highest absorption rate since the second quarter of 1997 (80%).
The median asking rent for apartments increased from $1,683 in the second quarter of 2021 to $1,745 in the second quarter of 2022, a 4% increase over the year. This is the sixth consecutive quarter with a year-over-year increase in the median asking rent price.