U.S. multifamily fundamentals remain largely favorable
The U.S. multifamily market remained healthy, with robust demand levels and investment pace during third quarter 2016, according to CBRE Research, though signs of moderation are becoming apparent.
Healthy demand was reflected by the absorption of 192,000 units during the 12 months ended Sept. 30, 2016. The apartment sector also has continued to see increased supply. The delivery of 59,000 new apartment units in the third quarter brought the trailing four-quarter total to 233,000 units, an increase of 24.1 percent from a year prior.
While tenant demand remains strong, some signs of weakness are showing in apartment fundamentals. CBRE notes the multifamily vacancy rate increased 20 basis points year-over-year to 4.5 percent. In addition, the rate of rent growth subsided to 2 percent for the year ended Sept. 30, 2016, the lowest level since early 2010, according to the report.
Property investment activity remained robust despite moderate cooling in market fundament