Rental Absorption Rate Remained Below 50% in Q4 2024

Seattle, WA, May 30, 2025-Less than half (49%) of newly built apartments completed in the fourth quarter of 2024 were rented within three months, up slightly from 47% the previous quarter, reports Redfin.

It was the fifth consecutive quarter that the rental absorption rate was below 50%, a speed that continues to lag behind pre-pandemic norms.

This is according to a Redfin analysis of the U.S. Census Bureau’s seasonally adjusted absorption rate data for unfurnished, unsubsidized, privately financed rental apartments in buildings with five or more units, dating back to 2012. The most recent data available covers apartments completed in the fourth quarter of 2024, and either rented or not rented within three months of then.

The rental vacancy rate for buildings with five or more units was 8.2% in the first quarter of 2025, tied with the previous quarter for the highest level since the start of 2021.

Apartments are taking longer to rent because there are record numbers of them coming onto the market. Nearly 125,000 new apartments were completed in the fourth quarter-the second highest number on record-following the previous quarter’s all-time high (142,900).

The increase in supply has created a much healthier market for renters, with asking rents dropping slightly recently after remaining largely stable over the past two years.

“Renters are in a relatively rare position where they can finally benefit from market conditions rather than scramble to keep up with them,” said Redfin Senior Economist Sheharyar Bokhari. “With more apartments available, renters can afford to be a little more picky about where they want to live and are in a stronger position to negotiate for concessions like flexible lease terms, lower rents or free parking.”

Approvals for multifamily construction permits have dropped to pre-pandemic levels, however, indicating that new apartment supply will start to taper off in coming months. That is likely to eventually lead to higher absorption rates and an uptick in asking rents.

Larger 3+ bedroom apartments completed in the fourth quarter were rented at the fastest rate among different bedroom types, with 53% leased out within three months.

That rate was unchanged from a year ago, even though there was a 58.6% year-over-year increase in the number of apartments being completed.

The absorption rate for more common 1-bedroom apartments was 44%, up from 40% a year ago. That was the same rate recorded for 2-bedroom apartment types, up from 41% a year ago.

Studio apartments recorded the biggest absorption rate increase across the different bedroom types, with 47% rented within three months, up from 38% a year ago.