Apartment Turnover Rate at 20 Year Low

According to a brief published by CBRE and referenced in an article in MultiFamily Executive, national turnover rates for multifamily housing are at their lowest level in the past 20 years. From the article:

A recent brief published by CBRE shows the turnover rate for multifamily housing has fallen to 47.5%, which is the lowest level in two decades. CBRE quotes numbers from RealPage that show a drop of 80 basis points. The decline is confirmed by additional evidence culled from six major real estate investment trusts (REITs). AvalonBay, Camden, Equity Residential (EQR), MAA, and UDR all show a lower turnover rate in Q1 2019 as compared with 2018 with an annual average drop of 2% to 42%. Essex showed a 1-point rise to 41%.

The drop represents an overall trend that has been happening since at least 2000, when the rate was clocked at 65%. According to CBRE, “lower turnover rates are generally interpreted as positives for the industry and a sign of favorable market strength at this point in the cycle.” Turnover ticked up a bit in the mid-2000s but then tumbled again during the Great Recession.

The lowest turnover rates were in the Northeast and Midwest, while the rates in the South and West were higher. Also, rates of turnover were lower in Class B and C properties than in Class A properties.

Turnover Rates Hit Historic Low

Renters are staying put at a historically high rate. In the Executive Summary for their 2018 Income & Expense Survey, the National Apartment Association reported that:

…turnover rates sank to their lowest point on record (data available from 2000) at 46.8 percent. Owners strived to lower turnover costs by focusing on resident retention and increasing renewal rates. The U.S. Census Bureau reported a similar historic low in renter mobility rates in 2017 (21.7 percent) compared to 35.2 percent in 1988.

Source National Apartment Association