The pandemic has reversed historical norms in the U.S. apartment market. In particular, smaller markets have seen big population gains and, as a result, have posted higher apartment occupancy rates lately than their larger market peers, according to a RealPage analysis.
Census Bureau data shows significant population gains in 2021 and 2022 in markets with less than 1 million residents, while urban areas with at least one million saw deep population declines during the same period. Simultaneously, apartment occupancy in smaller markets increased notably.
According to RealPage, occupancy rates among the nation’s largest 50 apartment markets – those with an existing apartment inventory of 110,000 or more – averaged 95.4% in March. Meanwhile, occupancy in secondary markets with 25,000 units to 100,000 units was 95.5%. Tertiary markets with less than 25,000 units had the tightest rates, at 95.9%.
In the five years leading up to the pandemic, the nation's largest 50 apartment markets had averaged a 95.4% – the same recorded in March of this year. However, occupancy in secondary markets was lower at 95.1% between 2015 and 2019, and was the lowest in tertiary markets at 94.6%.
“After most markets nationwide saw fluctuations, with occupancy rates peaking in 2022 before diving again in 2023, smaller markets have come out ahead in the years since as rates have leveled off,” said the report.
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