For the third quarter, buildings with five or more units had an average vacancy rate of 10.7%, down 40 basis points from the prior quarter but up 30 basis points from a year ago. When all types of rental units--including single-family rental homes--are factored in, the average Q3 vacancy rate came in at 9.9%, down from 10% in Q2 and up 10 basis points from Q3 2007.

Absorption levels are sliding down; in fact, the third quarter rate was the lowest seen in nearly five years. In the US, the absorption rate for new, unfurnished rental apartments completed in the third quarter was 53%, down from 60% in Q2 and 57% in Q3 2007. There were geographic differences. The highest vacancy rates were found in the South--13%--which had a 51% absorption rate. Absorption has remained relatively steady in the region, remaining around 50% for the past year. Vacancy in the West rose to 7.6% in Q3, despite a 63% absorption rate, up 13% from the prior quarter and 12% over last year. The Northeast had Q3 vacancy and absorption rates of 6.7% and 53%, respectively, for the three months between July and September, while the same figures for the Midwest were 10.3% and 44%. Absorption in the Northeast fell considerably --32 points--between the second and third quarters. That figure has been up and down in the Midwest; most recently, it ticked down 34 percentage points from three months ago, but only by 11 points in the past six months, and just three in the past nine months.

A rising minority population is the primary driver behind the growth of new households. In the third quarter, the number of renter households went up by 300,000 to 35.8 million, while the number of owner households rose 200,000 to 75.9 million--not too far off the total for the past few years. Because the total number of households has increased and the homeownership rate has remained steady, many of them are in the rental pool. Consequently, The 35.8 million renter households is 100,000 more than the previous all-time high, set during the first quarter of 2007.