Rising rental vacancy rates in large cities have not been accompanied by a surge in first-time buyers (FTBs). Indeed, 2020 saw the lowest share of FTBs since 1987. That implies many of those rental households who left large cities are either renting in cheaper areas or have moved back in with parents. The latter group represents a new source of pent-up rental demand and supports our view that rental vacancy rates in major cities will trend down next year and reach pre-COVID levels by 2023.
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