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Apartment rent concessions ease as vacancy falls below 9%
Concession usage slipped to 15.8% of stabilized units in July, while vacancy declined to 8.9% at the end of June and absorption rose 8% year over year to 124,600 units in the second quarter.
Apartment rent discounts are easing as the U.S. apartment market shifts away from pandemic-era construction and toward stronger demand, according to Bisnow, citing data from Realpage. Apartment concession use eased in July for the second consecutive month, with 15.8% of stabilized units offering discounts, down 70 basis points from June, even though concessions remain well above historical norms.
The publication also pointed to a drop in vacancy, saying the U.S. apartment vacancy rate fell below 9% for the first time since 2024 in the second quarter. Cushman & Wakefield data show vacancy at 8.9% at the end of June, down 35 basis points from the prior quarter, while absorption rose 8% year over year to 124,600 units, the strongest demand since mid-2024.
Bisnow linked the improving fundamentals to a reduction in new supply coming to market. Multifamily construction starts fell 7.1% year over year and 15.6% month over month in July to 421,000 units, and deliveries in July totaled 329,000 units, down 14.8% from the prior month and 25.6% from a year ago.
The article said the easing delivery pace is helping relieve pressure on landlords, particularly in higher-quality units. It added that Apartments.com, owned by CoStar Group, upgraded its multifamily outlook and now expects vacancy to fall to 8.2% by year end and rents to rise 1.4% in the third quarter.