Apartment Rents Drop: Record High Vacancies

Okay, here’s a breakdown of the key details from the provided text, ⁣focusing on the state of the ‍multifamily housing market:

Key Takeaways:

* Rents are Falling: National median rent for apartments fell 1% in November, reaching $1,367. This marks the fourth consecutive month-over-month decline. Rents are ‍down‍ 1.1% year-over-year and 5.2% from their 2022 peak.
* Vacancy rates are Rising: The ⁤national multifamily vacancy rate is at 7.2% (as of November), remaining at a record high for this index ⁢(dating back to 2017).
* Supply & Demand Imbalance: A⁢ large amount of new multifamily housing supply is still coming online, while demand is weakening.
* Young Adults & Household Formation: A key factor in the ⁣weakening demand is that a higher percentage of 18-34 year olds (32.5%) are living ‍with their families – the highest rate in a while.This is attributed to high rental costs ⁢and a tougher job market ⁣for recent college graduates. This demographic is traditionally a core source of rental demand.
* Construction Slowdown: The ⁣surge in multifamily construction is slowing down, but there’s still a notable amount of new units entering the market.
* Seasonal Impact: The fall typically sees a slowdown in multifamily rents, but this year the decline is ⁤more pronounced.
* REIT Impact: The weakness in the market is reflected in the stock performance of major public apartment REITs (like AvalonBay).

In essence,the article paints a picture ⁣of a ‍cooling multifamily housing ⁣market,driven by increased⁤ supply,weakening demand (especially from young adults),and economic factors.

additional Details:

* The article is from CNBC’s “Property Play”‍ newsletter.
* CoStar reported the largest monthly drops in median rent in 15 years of ⁤tracking.
* ⁢ Apartment list researchers ‍noted that a potential rebound in annual growth earlier in the year “stalled out and reversed course” during the summer.