The rental-apartment vacancy rate declined to 4.6% during the third quarter from 4.7% in the second, said Reis, a real-estate research firm.
That is the smallest quarterly improvement in the vacancy rate since the sector started recovering in early 2010.
Rents increased 0.8% in the third quarter to an average of $1,090 a month, according to Reis, which tracks trends in 79 markets. That is slower than the 1.1% increase in the second quarter but strong compared with historical averages.
“Fundamentals still remain relatively robust, particularly given the context of high unemployment and tepid economic growth,” Reis said in its report.
The firm said there are signs of cooling in the market, which has been one of the strongest real-estate sectors in recent years. Until now, demand has been brisk from people unwilling or unable to buy homes.
But recent signs of a rebound in home sales have stoked concern among apartment-building landlords and investors that demand could weaken.
“Households may feel a greater impetus to consider buying homes while mortgage rates remain low,” the Reis report said.
Housing experts say that it isn’t clear whether the slowing pace in the third quarter was due to increasing home sales or the weak economy. “Renters might feel attracted to the possibility of buying,” said Luis Mejia, director of multifamily research at the CoStar Group, which collects and analyzes commercial real-estate and economic data. But the “effect of the housing recovery on rental activity is something that is going to take longer to really become evident.”