Apartment Absorption Rates Declined in Q4 2023

Charlotte, NC, June 3, 2024-"According to the Census Bureau's Survey of Market Absorption of New Multifamily Units, 42% of the 91,060 unsubsidized apartments completed in Q4 2023 were absorbed (aka rented) within the first three months following project completion,” reports Truist. 

“This is a full ten percentage points lower than the absorption rates from Q3 2023 and 14 percentage points lower than the beginning of 2023. Results from the survey have fallen significantly following the Q3 2021 peak of 75%, and these rates are now testing new lows for the measure. Note that during the financial crisis, absorption rates for apartments fell to 44%. Condo absorption rates during the Q4 2023 were 56%. We continue to think multi-family is overbuilt and that a deep and prolonged contraction is coming to the industry. Completions remain notably elevated, with quarterly completions over 90K units for only the third time in history.”