New Apartments Sit Longer as Renters Gain the Upper Hand
Less than half of newly built apartments completed in the fourth quarter of 2024 had been rented within three months, up slightly from 47% the prior quarter, according to a new report from Redfin. The real estate brokerage noted this was the fifth consecutive quarter that the rental absorption rate was below 50%.
With record supply coming—nearly 125,000 apartments in the fourth quarter—Redfin found that apartments are taking longer to rent.
“Renters are in a relatively rare position where they can finally benefit from market conditions rather than scramble to keep up with them,” said 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.”
Larger units, three bedrooms or more, completed in the fourth quarter leased at the fastest rate among bedroom types, with 53% rented within three months. This rate was unchanged year over year, even though there was a 58.6% increase in the number of units completed.
Studios had the biggest absorption rate increase across the different bedroom types, with 47% rented within three months, up from 38% a year ago. One- and two-bedroom apartments saw an absorption rate of 44%, up from 40% and 38%, respectively, a year ago.
Source: Multifamily Executive
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