We just witnessed the weakest 3rd quarter for apartment leasing in the 30+ years of tracking the U.S. apartment market. Net absorption registered moderately negative, occupancy ticked down and rents flattened. Is the slowdown due to renters hitting an affordability ceiling?

For most of us, our gut reaction to that question is probably, "Yes." But what does the data tell us?

If affordability is the major reason, we should see three key signals: 1) Weakening rent collections, 2) a "flight to affordability" – a shift in demand toward cheaper submarkets and the more affordable Class C asset class, and 3) stagnating renter incomes. Let's examine all three for clues.

• Are Rent Collections Weakening?

Not yet. Rent collections – the share of rent due that renters pay each month – actually climbed UP in September. Collections improved 20 bps month-over-month and 60 bps year-over-year to 95.6%. That marked the best September for rent collections since 2019.