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ew data from Redfin shows that only 47% of newly built apartments completed in Q3 2024 were rented within three months, matching the lowest absorption rate on record aside from the early pandemic period. This slow leasing pace is largely due to the massive number of new options available - a record 142,900 apartments were completed in Q3.

    According to Redfin Senior Economist Sheharyar Bokhari, some landlords are offering incentives like free parking to attract tenants, but these may not last. As developers pull back on construction, with permits down nearly 10% year over year, renters will eventually face fewer choices and potentially higher rents next year.

    The pandemic led to record-fast apartment absorption and soaring rents, prompting a surge in construction that has since contributed to higher vacancy rates and lower rents. The rental vacancy rate for buildings with five or more units is now at 8.2%, the highest since early 2021. While rent growth has slowed, it's still far from the double-digit increases seen during the pandemic.

    Absorption rates were relatively uniform across unit types, but studio apartments bucked the trend, with 50% rented within three months - up from 42% a year earlier. In contrast, absorption rates fell for other unit types: 1-bedroom apartments (49%, down from 54%), 2-bedroom apartments (50%, down from 51%), and 3+-bedroom apartments (51%, down from 56%). The resilience of the studio apartment market may be due to limited supply, as completions of all other unit types saw double-digit increases in Q3.