Redfin Reports Asking Rents for Newly Built Apartments Rise 1.5%, the Biggest Spike in 18 Months
Rents rose in the West and Midwest in the third quarter, even after a surge in construction
The rise in rents came after two consecutive quarters where rents for new apartments fell by more than
The median rent for newly constructed apartments bounced back above
Rents fall in the Northeast, as other regions see increases
The regional breakdown tells a number of different stories. Asking rents for new apartments actually fell year over year in the Northeast (-
The West region saw the biggest uptick in median rents (
Midwest asking rents ticked up
New Apartment Median Rents and Completions by Region (Q3 2024) |
||||
|
Median New Apartment Asking Rent |
Median New Apartment Asking Rent YoY |
No. of New Apartments Completed |
New Apartment Completions YoY |
Northeast |
|
- |
11,390 |
|
Midwest |
|
|
22,430 |
|
South |
|
|
58,880 |
|
West |
|
|
25,910 |
|
“We would usually predict that rents will stay flat, or even potentially fall, when there are so many new apartment buildings opening up. What’s interesting in the third quarter is that rents are rising by more than the national average in the West and Midwest, even after the number of new apartments spiked between 30
New apartments fill up slower, returning to pre-pandemic speeds amid construction boom
A separate Redfin report found that just over half (
The absorption rate, referring to the percentage of new apartments rented out within three months of being finished, was the second-lowest seasonally adjusted share since mid-2020. The rate was down slightly from
Absorption rate returns to pre-pandemic levels as apartment completions rise
The absorption rate over the past two quarters has returned to the 50
The absorption rate has slowed due to the boom in new apartment construction in areas where the pandemic demand spiked between 2020-2022. This led to the highest level of new apartment completions in at least 12 years in the second quarter.
Nationally, the rental vacancy rate for buildings with five or more units was
It’s worth noting, however, that apartment construction is slowing. This is highlighted in Census data showing that the number of new apartments under construction at the end of October was down nearly
New apartments filling up quickly in the Northeast, taking longer in the South and Midwest
Two-thirds (
|
Absorption Rate
|
Absorption Rate
|
2023→2024
|
Northeast |
|
|
+9 ppts |
Midwest |
|
|
-10 ppts |
South |
|
|
-5 ppts |
West |
|
|
-14 ppts |
Meanwhile, new apartments filled up slowest in the South, with the absorption rate dropping to
The West region saw the absorption rate drop the most from a year earlier, down 14 percentage points to
To view the full new rental construction report, including charts and metro-level insights, please visit: https://www.redfin.com/news/new-construction-rents-Q3
To view the full rental absorption report, including charts and metro-level insights, please visit: https://www.redfin.com/news/new-rentals-absorption-q3
About Redfin
Redfin (www.redfin.com) is a technology-powered real estate company. We help people find a place to live with brokerage, rentals, lending, and title insurance services. We run the country's #1 real estate brokerage site. Our customers can save thousands in fees while working with a top agent. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than
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View source version on businesswire.com: https://www.businesswire.com/news/home/20241216356665/en/
Contact Redfin
Redfin Journalist Services:
Kenneth Applewhaite
press@redfin.com
Source: Redfin