Multifamily vacancy normally falls in the spring due to increased seasonal leasing activity and higher demand, according to CBRE in its multifamily finance update report.
This year, COVID-19 led to an immediate and large drop in leasing activity. While May leasing momentum improved from that of late March and April, new leases did not totally fill vacated units. Job losses, employment uncertainty and stay-at-home/work-from-home orders persuaded some renters to leave the rental pool (doubling up with friends or family), behavior typical in recessions.
From March to May, U.S. multifamily vacancy rose 30 bps to 4.75 percent (+180 bps annualized), according to Axiometrics. May’s vacancy level is still quite acceptable and a 30 bp rise is moderate, but the increase confirms falling demand.
From March to May, the average effective rent fell 1.7 percent to $1,412 (9.6 percent annualized change). (Effective rents include concessions.) With more units to fill, owners b
