Redfin reports that newly built homes are filling up faster but slower than last year

54% of U.S. apartments completed in the first quarter were leased within three months, up from 47% in the previous quarter

SEATTLE, October 1, 2024–(BUSINESS WIRE)–(NASDAQ: RDFN) – More than half (54%) of new homes completed in the first quarter were leased within three months – a rebound from a four-year low of 47% a quarter earlier – according to a new report Report from Redfin (redfin.com), the technology-based real estate brokerage.

That’s still the second-lowest quarterly seasonally adjusted share since mid-2020 and down from 58% a year ago.

The increase from the previous quarter – which saw the slowest absorption rate of any quarter since the start of 2020 – could be a sign that building owners are luring tenants with cheaper rents and perks.

The absorption rate for new housing has been slower this year than in the previous two years due to a surge in new home construction — particularly in Sun Belt metros that have become popular destinations during the pandemic.

“With only about half of new apartments rented within three months, renters not only have more choice, but likely the ability to negotiate a better deal,” said Sheharyar Bokhari, senior economist at Redfin. “A lot of new apartments are being built and developers are competing with each other to fill them quickly.”

Nationally, the rental vacancy rate for buildings with five or more units was 7.8% in the second quarter, up from 7.4% a year earlier, another indication that supply is slightly outpacing demand.

Studio apartments fill up faster when completions decline

With less inventory available, studios filled up slightly faster than other bedroom types: 58% were rented within three months, up from 42% last year. Studio apartments were the only type where completions fell in the first quarter, falling 7.1% year over year.

In comparison, 53% of new one- and two-bedroom apartments were rented within three months, down from 58% last year. Completions in both categories increased more than 20% year over year in the first quarter.

Percentage of new apartments rented within 3 months

New three-plus-bedroom apartments – the rarest room type – saw the biggest year-on-year decline, with 53% rented within three months, compared to 65% last year. This happened after a slight increase in completions (+5%).

The story continues

Redfin’s report is based on an analysis of seasonally adjusted U.S. Census Bureau absorption rate data for unfurnished, unsubsidized, privately financed rental housing in buildings with five or more units from the first quarter of 2012. The most recent data available measures housing in the first quarter of 2024 were completed and either rented or not rented within three months thereafter. Please note that absorption rate data by bedroom type is not seasonally adjusted.

The full report can be found at: https://www.redfin.com/news/new-rentals-absorption-Q2

About Redfin

Redfin (www.redfin.com) is a technology-based real estate company. We help people find homes with brokerage, rental, credit, title insurance and renovation services. We run the country’s leading real estate brokerage website. Our clients can save thousands in fees by working with a top agent. With On-Demand Tours, our home buying customers see their home first, and our lending and title services help them close the purchase quickly. Customers selling a home can have our renovation team repair it to sell it for the highest price. Our rental business enables millions of people across the country to find apartments and houses for rent. Since launching in 2006, we have saved our clients more than $1.6 billion in commissions. We serve more than 100 markets in the United States and Canada and employ over 4,000 people.

Redfin’s subsidiaries and affiliated brands include: Bay Equity Home Loans®, Rent.™, Apartment Guide®, Title Forward® and WalkScore®.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn more about real estate market trends and download data, visit the Redfin Data Center. To be added to Redfin’s press release distribution list, email [email protected]. Click here to view Redfin’s press center.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241001783095/en/

Contacts

Contact Redfin
Redfin Journalism Services:
Kenneth Applewhaite
[email protected]