The total national rental vacancy rate was 7.1 percent in the third quarter of 2018, down four basis points year-over-year, and still below historical levels.
For December, multi-family housing starts hit a seasonally-adjusted annual rate of 320,000. In the West, starts were nearly cut in half from 127,000 (SAAR) to 62,000 (SAAR). In 2018, multi-family housing starts accounted for 30 percent of total starts, versus 29 percent in 2017. According to the National Association of Realtors, low vacancy rates are an indicator for future growth in certain metros' multi-family real estate market this year.
In some metro areas, vacancy rates have dropped significantly in 2017 Q1- Q3 indicating that a fast absorption of apartments for rent and strong growth potential for multi-family investment if rates continue to fall. The large drops in vacancy rates in these metro areas indicates a potential for more multi-family investments also if vacancy rates keep falling in the coming months: Birmingham-Hoover, AL (12.3 percent), San Antonio-New Braunfels, TX (7.2 percent), Pittsburgh, PA (6.7 percent), and Kansas City, MO-KS (7.3 percent).