Rental vacancy rates are edging up throughout the country because more single-family homes, duplexes and condominiums are on the rental market, a new survey by Advance Mortgage Corp. found.
It pointed particularly to the Washington suburbs as an area with a substantial number of houses for rent.
At the same time, the vacancies in apartments nationwide appear to be at a postwar low, according to the company's latest quarterly survey of U.S. housing markets.
"This reflects the smallest new supply of rental apartments in more than 20 years," Advance said. "Only some 180,000 units will be completed this year, compared to 300,000 last year."
But in the Washington area, the rental apartment vacancy rate increased substantially, the survey found. In the District, the vacancy rate went from 0.8 percent in July 1981 to 3 percent in this July; in Maryland the rate rose from 2.5 percent to 5.9 percent during the same period; and in Virginia the increase was from 1 to 2.5 percent.
Rents in the metropolitan Washington area increased by 9 percent over a year, the first time in more than a decade they have matched the consumer price index, it said. "Doubling up and moving back is heavy," the report added.
In single-family sales, Advance estimated a steady 1,100 a month in the Washington area, the same as last year, and added that the local cancellation rate had dropped from 18 to 11 percent.
Standing inventory of single-family homes in this area dropped from 2,200 to 1,300 in only five weeks, it calculated. But it would take a year's sales at current rates to sell off the current condo inventory here, it said. The 9,000 units of condo inventory is down from 11,000 in the spring, but it noted that 18high-priced condos in Northwest either turned rental, stopped marketing or slashed prices.
On a national basis, Advance concluded that the inventory of unsold homes throughout the United States is even larger than widely cited government data show because those figures do not take into account today's high cancellation rates.
Census Bureau data, based on deposits taken on homes, indicate that the amount of inventory of new homes is nine months at current sales rates. But cancellations average about 20 percent nationwide and in some markets approach 40 percent, the company said. Taking that into account, the inventory of single-family homes nationwide is 1 1/4 years and for condominiums is close to 2 years, it concluded.
Overall, the market is "the most skewed. . .in memory," the survey found. One-fifth of all permits in the first half were in Texas, with 9 percent of the national total in Houston alone. "While the national housing market is having its worst year since World War II, Texas is enjoying its best year ever and Houston its second best," it said. Other strong markets are Atlanta, Oklahoma City and Orlando, Fla., it found.
But Advance also predicted that the strong markets will not grow stronger in the second half, regardless of what interest rates do, because those cities are starting to feel a slowdown in job growth. The impact of the recession is more important to the housing market than interest rates, it concluded