America's rental apartments are full. Historically full, in fact.
The national occupancy rate hit 95.3 percent in May, the highest on record, according to Axiometrics, a real estate analytics firm.
"The May rate historically is the start of each year's occupancy peak, meaning occupancy should remain at the current level or higher," said Stephanie McCleskey, Axiometrics' vice president of research.
With higher occupancy comes higher rents; in May rents grew 5 percent nationally, the fourth straight month at or above that mark. Rent growth was at just 3.6 percent in May 2014, according to Axiometrics.
"Owners and investors are having a profitable start to the year," McCleskey said. "One interesting point is that rent growth is increasing in previously challenged markets in the East and Midwest, such as Chicago, St. Louis, Philadelphia, Kansas City, Baltimore and even Detroit," noted McCleskey.
Apartment demand, which some investors thought would abate as the housing market recovered, is doing just the opposite. It is also coming from both ends of the age scale. Millennials, finally finding jobs and moving out of group or family homes, are pushing rental demand; downsizing baby boomers, many of them soured on homeownership by losses from the housing crash, are doing the same.
"The Great Recession lowered the homeownership rate, and it's just so hard to get a footing from here, so you are sort of starting from a diminished base, particularly for younger people, but for all age groups," said Laurie Goodman, director of the housing finance policy center at the Urban Institute.
Goodman just published a paper claiming the homeownership rate, now at 63.7 percent, the lowest in 25 years, will continue to decline through 2030. She said a rental surge is coming, and that of the 22 million households formed in the next 20 years, 13 million will be renters.
"We are nowhere near building enough to meet demand," added Goodman.