Eye On Housing
The Census Bureau, in collaboration with the Department of Housing and Urban Development (HUD), produces the Survey of Market Absorption (SOMA), which tracks apartment and condominium completions, absorption rates (the share of apartments/condos rented or purchased within the first 3 months after completion), and asking rent prices.
In the second quarter of 2017, completions of unfurnished, unsubsidized, privately financed apartments for rent in buildings with five or more units totaled to 73,900, up 19 percent or 11,900 units from the second quarter of 2016. Meanwhile, the absorption rate rose 5 percentage points to 62 percent compared to the same period last year (Figure 1). Although the absorption rate increased in the second quarter, it is still down from its second quarter ranges seen in 2012 to 2015: the mid-60s to 70 percent. The median asking rent was $1,563 in the second quarter of 2017, $135 more than the median asking rent in the second quarter of 2016.
In the second quarter of 2017, condominium completions stood at 4,100, up from the 3,200 built in the second quarter of 2016. The condominium absorption rate increased significantly, going from 64 percent in the second quarter of 2016 to 76 percent in second quarter of 2017 (Figure 2). The continued year-over-year growth in both completions and the absorption rate signals an improving condominium market.
Figure 3 shows the share of rental apartments in buildings with five or more units that are subsidized by a tax credit or by some other government program (HUD and USDA programs) as a share of total apartments completed in the second quarter of 2017.[1] Subsidized apartments totaled to 10,500 units or 11.7 percent of total apartment completions in the second quarter of 2017. This is a significant jump over the second quarter of 2016 in which 4,700 subsidized units were built, accounting for only 7 percent of total apartment completions.
[1] Apartments subsidized by multifamily bonds not included in count.
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