About 52% of newly built apartments that were completed in the second quarter of this year were rented within three months.

That absorption-rate statistic may sound impressive, but it’s actually down slightly from the 54% of new apartments in the first quarter that were rented within three months. In fact, the most recent absorption rate is the second lowest seasonally adjusted share since mid-2020, according to Redfin.

The Redfin analysis of the U.S. Census Bureau’s seasonally adjusted absorption rate data for unfinished privately financed rental apartments in buildings with five or more units, showed that the absorption rate has slowed due to the increase in new apartments being constructed in areas where the pandemic demand spiked between 2020 and 2022.

That demand culminated in the level of new apartment completions in the second quarter of 2024 being the highest in at least 12 years. The rental vacancy rate for buildings with five or more units was 8% in the third quarter, the highest rate since the first quarter of 2021, “one more sign that supply continues to outpace demand,” wrote analysts in the Redfin report.

“Thanks to the apartment construction boom, many Americans will remain renters or become renters in 2025,” said Redfin Senior Economist Sheharyar Bokhari. “Many new buildings started during the pandemic are due to come online in coming months. With increased supply, owners are likely to continue offering concessions or even reduced rent to fill their newly completed buildings more quickly.”