Reis, Inc. released data on Wednesday that shows a big surge in net absorptions, despite the fact that there is very little new supply of apartment units.  Apartment vacancies dropped 40 basis points, the report showed, to 6.2 percent.  It's the biggest drop in apartment vacancies ever recorded.  But while rents continue to rise, vacancy rates continue to drop.

The stars are currently lined up in a big way for the US apartment market.  The nation's job market is steadily improving, and as people get jobs, demand for housing also rises, especially for younger Americans.  But with single family homes still not selling, and prices expected to continue falling for at least the rest of this year, few of these newly employed Americans are willing to commit to buying a home.

Furthermore, home sales have been hindered by an increasingly tight mortgage market.  Although mortgage applications rose 6.7 percent last week, much of that increase came in the form of a ten percent increase in requests for FHA loans from buyers looking to lock in before FHA insurance premiums are raised on Friday.  FHA-loans are essentially the only low down payment loans available anymore, as most non-FHA lenders are now requiring 20 percent down payments.

So even though improvements in the job market and the overall economy have helped to increase demand in the battered US housing market, strict lending standards and a lack of confidence in the housing market are pushing more and more people into renting, rather than owning their homes.