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Detroit Ties for Top Occupancy Rate in July

Detroit Ties for Top Occupancy Rate in July

What does Detroit have in common with New York City? The tightest occupancy among major U.S. apartment markets in July. Occupancy in the Detroit-Warren-Dearborn apartment market landed alongside New York’s rate of 97.5% in July as the highest among the nation’s 50 largest markets. In Detroit, that rate also matched June’s occupancy reading as the highest in 18 years. Though those recent rates marked a long-term high, tight occupancy has been the norm in Detroit in recent years. Over the past four years, occupancy has registered at roughly 96% to 97%, remaining above the U.S. averages during that period. With solid occupancy, operators in Detroit have gained some pricing power. Same-store rents for new leases in Detroit rose an average of 3.3% annually this cycle. And over the past four years, rental rates rose an average of 3.7% annually, with most of those increases in line with or above the U.S. average. The strength of Detroit’s apartment market has been in part a reflection of a lack of available product. Detroit’s existing unit base has expanded just 2.3% this cycle, equating to an average growth rate of less than 0.2% annually. That was by far the lowest expansion rate among major U.S. markets.

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