The U.S. multifamily sector headed into the third quarter of 2021 on the upswing, as record-setting demand pushed vacancy rates lower in the first half of the year. In turn, multifamily owners capitalized on the scarcity of units and were able to raise rents at a breakneck pace.
Despite such strong momentum, questions remained whether this type of performance was sustainable in the near term because of the ever-evolving public health situation and uncertain trajectory of the current economic recovery.
Through the first two months of the third quarter the answer was a definitive yes. Furthermore, the nation appears primed to sustain relatively strong rent growth trends through the end of this year.
As of the end of August, national asking rents were up 9.8% year over year and up 2.4% since the end of June. The strong demand for apartments has persisted over the past two months, pushing the national vacancy rate down 30 basis points since the end of the second quarter. The national vacancy rate of 4.8% is not only a two-decade low for the country, but it represents a roughly 200-basis-point decline compared to the second quarter of 2020, right after the pandemic hit.
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