The demand for apartments has dried up, all pointing toward economic issues in the future. Negative demand is an indication more people are moving out than are moving in.
Why it matters: Soaring rent prices have been a major driver of inflation. This could be a sign that those price pressures are starting to ease — but it could take time before the consumer price index numbers reflect the shift.
State of play: Demand for new leases took a surprising tumble in the third quarter, according to data from RealPage. It’s the first time in 30 years that the firm has seen negative demand for new apartments in Q3, traditionally a strong season.
“Negative demand” means more folks moved out of apartments than moved in.
Add this chart to some other signs that rents have peaked, as I wrote last month.
What’s happening: The slowdown isn’t necessarily about affordability but is more to do with how folks are feeling about the economy, according to RealPage’s analysis. Negative demand is a sign of a slowdown in new household formation — people holding off on moving out of their current situation, in other words.Axios Markets By Emily Peck and Matt Phillips · Oct 12, 2022