Apartment Housing Demand Remains Strong;
Investors Pursue Yield to Broader Range of Markets

The apartment sector notched another healthy quarterly performance as the resounding strength of the employment market sustains demand for rentals. Class B and C units maintained particularly tight vacancy levels, delivering solid rent growth. Markets with elevated construction levels could face pockets of heightened competition as new apartment facilities go through lease-up.
Although development is elevated, it remains concentrated. Roughly one quarter of apartments slated for delivery this year will come online in only five markets.
The United States is on track to achieve multifamily rent growth of 3 percent or better for the ninth consecutive year in 2018.
Historically low apartment cap rates have encouraged many buyers to consider a wider range of locations and asset classes in order to reach targeted yields.