The rental apartment market continued to post solid growth in 2015. Both multifamily starts and completions increased.
Data from the US Census Bureau shows that multifamily for-rent starts totaled to 372,000 units in 2015, which is 13 percent higher than in 2014.
According to the Survey of Market Absorption (SOMA), completions of privately financed, unsubsidized, unfurnished rental apartments in buildings with five or more units reached 259,500 in 2015, which is 23 percent higher than in 2014.
Likewise, apartment absorption rates increased in 2015, indicating solid demand growth. For the 65,100 apartment units completed in the fourth quarter of 2015, 59 percent were rented (or absorbed) within the following 3 months (first quarter of 2016). The absorption rate climbed 5 percentage points in comparison to the fourth quarter of 2014.
Figure 1: Rental Apartments Completions and Absorption Rates by Quarter, 2005-2015
The for-sale multifamily market posted 26,000 starts in 2015, which is lower than the 27,000 started in 2014. However, completions and absorption rates of for-sale units increased in 2015.
In 2015, 12,100 condominium and cooperative were completed, compared to 7,100 in 2014. The absorption rate increased, going from 78 percent in the fourth quarter of 2014 to 85 percent in the fourth quarter of 2015 (Figure 2).
Figure 2: Condominium and Cooperative Completions and Absorption Rates by Quarter, 2005-2015
Figure 3 shows the number of subsidized apartments and apartments associated with tax credits, also collected in the SOMA. In 2015, there were 30,500 units completed in this category, which represented 9.8 percent of all apartment completions. In 2014, 26,500 subsidized apartments and apartments associated with tax credits were completed, representing 10.3 percent of all completions.
Figure 3: Subsidized Apartments, and Apartments Associated with Tax Credits Completions, 2005-2015