The U.S. apartment vacancy rate fell to 4 percent in the first quarter of 2014 as the market's recovery stretched into its fourth year, according to real estate research firm Reis Inc.
The vacancy rate now stands 400 basis points below its peak of 8 percent at the end of 2009. Rents remain at record-high nominal levels, although labor market weakness is limiting the ability of landlords to jack up rents at an even faster pace.
"To be sure, landlords are not raising rents at this relatively slow pace out of the kindness of their hearts," said Reis senior economist and associate director of research Ryan Severino.
Analysts have said that several factors are driving down vacancies. Inventory is scant in metro areas across the country, and open houses meanwhile are mobbed by renters.
Young and middle-age buyers who in previous eras might have been homebuyers are instead staying in the rental market as banks require bigger down payments and polished credit.
There is also a new, "perma-renter" class made up of those who, burned by all they saw during the foreclosure epidemic, have decided to stay renters for good.
"Demand for apartments is seemingly insatiable," said Severino.
New Haven remains the tightest market in the country, with a 2.3 percent vacancy rate, according to Reis.
California markets – San Jose, San Diego and Riverside/San Bernardino – boast vacancy rates that are marginally higher but are experiencing greater vacancy compression and will likely soon overtake New Haven.
New York, Reis said, continues to slide down the list, tied for the seventh-tightest market in the country.