Demographics are favorable for renters, as the 20-34 age group is growing in the US. However, supply is also picking up, balancing out the increased supply. As a result, vacancy may be bottoming out. Here is a great article on Calculated Risk that shows the data.
The 20-34 year old age group is a key group of renters. As can be seen from the below graph, the population for this age group has been growing, and is predicted by the census to continue growing through 2020. This is great news for apartment demand!
On the flip side, supply is also increasing, with 250k-260k completions planned this year, and more in the coming years. This may balance the increased demand, suggesting vacancies may be bottoming out. Table from Calculated Risk below:
Year | Completions | Starts |
1990 | 297.3 | 260.4 |
1991 | 216.6 | 137.9 |
1992 | 158.0 | 139.0 |
1993 | 127.1 | 132.6 |
1994 | 154.9 | 223.5 |
1995 | 212.4 | 244.1 |
1996 | 251.3 | 270.8 |
1997 | 247.1 | 295.8 |
1998 | 273.9 | 302.9 |
1999 | 299.3 | 306.6 |
2000 | 304.7 | 299.1 |
2001 | 281.0 | 292.8 |
2002 | 288.2 | 307.9 |
2003 | 260.8 | 315.2 |
2004 | 286.9 | 303.0 |
2005 | 258.0 | 311.4 |
2006 | 284.2 | 292.8 |
2007 | 253.0 | 277.3 |
2008 | 277.2 | 266.0 |
2009 | 259.8 | 97.3 |
2010 | 146.5 | 104.3 |
2011 | 129.9 | 167.3 |
2012 | 157.6 | 233.9 |
2013 | 186.2 | 293.7 |
20142 | 240.0 | 334.0 |
1 5+ units is close to the number of units built for rent each year. | ||
2 Pace through April 2014, completions will probably be above 240,000 for 2014 |
Read more at http://www.calculatedriskblog.com/2014/05/apartments-supply-and-demand.html#AktYzVEQiqTL2EWF.99