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The tightened market means that thernabsorption rate of rental units has also picked up and the most recent figuresrnfor newly built, unfurnished, unsubsidized apartments puts rentals at thernfastest pace in a decade.  The CensusrnBureau puts the most recent 3- and 6-month absorption rates at 64 percent andrn83 percent respectively showing, the economists say, that the demand is therernto absorb the new supply.</p

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The increased demand is, of course, a reciprocalrnof the decline in overall homeownership in the U.S. which fell to 64.7 percentrnin the second quarter, the lowest rate since 1995.  Indeed, over the past four quarters allrngrowth in household formation has belonged to renters.  </p

The decline in homeownership has beenrnprimarily concentrated among younger households.  Among households under age 35 it has fallenrnfrom 43.6 percent in the second quarter of 2004 to 35.9 percent ten yearsrnlater.  </p

Vacancy rates have also tumbled to theirrnlowest levels since 2000 which has place upward pressure on rents.  On average, Freddie Mac says, inflationrnadjusted rents have returned to their peak levels of 14 years ago and the lowrnvacancy rates appear to be positioning rent increases to outpace the growth inrnoperating costs over the coming year. </p

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Comparing estimates of rents on arnprimary residence to consumer prices for non-shelter items gives a realrn(inflation adjusted) rent growth of 9 percent over the period from Decemberrn1999 to June 2014.  This figure has variedrnacross metropolitan areas with rent growth generally highest in large metros</band those in the West or Northeast.  Inrnthe south only Miami and the Washington-Baltimore area have had real rentsrnexceeding the national average.  In thernMidwest Chicago is the only city to beat that average.  </p