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U.S. apartment vacancy rate flat at 4.1 percent in second quarter: Reis

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[July 02, 2014]  (Reuters) - U.S. apartment vacancy rate was unchanged in the second quarter, while new construction rebounded as weather improved, real estate research firm Reis Inc <REIS.O> said in a report released on Tuesday.

The national vacancy rate was 4.1 percent, unchanged from the first quarter but down from 4.3 percent a year earlier.

New construction rose to 33,210 units, outpacing the number last year.

Rents remain at record-high nominal levels, although labor market weakness is limiting landlords' ability to raise rents at a faster pace.

"Nonetheless, landlords continue to extract whatever rent increases they can out of their tenants, causing rents to inch higher," Ryan Severino, senior economist for Reis, said in a statement.

Asking rent rose 0.8 percent to an average $1,099 per month during the second quarter. Rents had risen 0.6 percent a year earlier.

New Haven remained the tightest market in the United States, having the lowest vacancy rate of 2.2 percent.

Reis noted strong decline in vacancy rate in markets such as Columbia, Tucson, Omaha, Las Vegas, Richmond and Lexington.

Usually, California markets see the strongest decline in vacancy rate.

Markets lagging during the recovery, which is now in its fourth year, are beginning to gain ground, Reis said.

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However, markets that led the recovery were losing some steam, especially as construction there was ramping up.

Reis said 45 of the 79 markets it tracked saw a decline in vacancy from a year earlier, while rents in all markets rose.

New York remained the most expensive market.

The average rent in New York was 47 percent higher than in San Francisco, the second most expensive market, Reis said.

(Reporting by Mridhula Raghavan in Bangalore; Editing by Kirti Pandey)

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