Economic Update (August 1, 2012)

The fundamentals for multifamily residential sector continue to improve in the second quarter, as rental vacancy rates fell to the lowest level in a decade.

  • The rental vacancy rate declined 20 bps, to 8.6 percent, compared to a peak above 11 percent in 2009 (Chart 1).
  • New demand for living space is flowing almost entirely into rental units (Chart 2).
  • Demand for rental units remains strong even as the homeowner market begins to stabilize. For example, the homeowner vacancy rate has fallen nearly a full percentage point from its peak (Chart 3) and housing prices have turned up in recent months (Chart 4).

Rental Vacancy



Household Formation


Vacancy Rates

House Prices

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The Market Commentary blog on presents analysis of the macro- and micro-economic fundamentals impacting the REIT and commercial real estate industry. The Nareit economics team offers their commentary on the state of the market, the outlook for commercial real estate and breaking macroeconomic news. The opinions set forth here are solely those of its author(s), and do not necessarily reflect the views of the Nareit or its membership. For more, see our Terms of Use.