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By New_Deal_democrat January 28, 2016 10:35 am
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Apartment rents soar 5% in 4th Quarter; vacancies decline back to generational low
This morning's release on the apartment vacancy rate and median asking rents was a true "Holy Cr*p!" moment.  To cut to the chase, the median asking rent for an apartment in the US jumped by over 5% in the 4th Quarter alone!  YoY the increase is about 7%.  Here's the graph showing the damage:  
 
 
 
Note that the above graph is nominal prices.  Because owner's equivalent rent is such a huge portion of CPI, to put this in "real" terms, in the below table I am adjusting by "usual weekly wages," a median measure of income:
 
 
In the above table, I have selected a few prior years with interim high and low readings, as well as the last 4 years, and further broken out 2015 by quarter.
 
Meanwhile the apartment vacancy rate declined back to its generational low:
 
 
This huge increase in rents, and decrease in vacancies, happened despite more apartment and condos having been built in 2015 than at any point in almost 30 years:
 
 
 Note that the building of multi-unit dwellings is following a similar trajectory with the large Millennial generation as it did with the large Boomer generation half a century ago.
 
With such huge profits to be made, I expect the boom in apartment and condo building to continue, perhaps approaching its 1972 peak within the next few years.
 
In the meantime, renters - who tend to be among the lowest 2 quintiles in wage earners in the US, who have suffered the biggest hit to median wages - are being really hard hit.
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