Job growth is frequently relied on as a metric for predicting future apartment absorption. However, findings from MPF Research indicate that this metric’s reliability is “surprisingly bad.” In some instances, there’s a strong correlation; in others, hardly any at all.

Using a variety of techniques, MPF analyzed the relationship between job growth and apartment demand during the past 14 years. For the combined core 50 apartment markets nationwide, the ratio between annual job growth and annual net absorption for apartment units varied widely, ranging from -161 jobs per unit of demand to +130 jobs per unit of demand.

The ratio ranged from -7 to +17 during the current cycle of strong apartment demand that began at the start of 2010, MPF reports. The variation is even greater when looking at individual metro areas: In MPF’s home metro of Dallas/Fort Worth, for example, using the long-term average of 4.9 jobs per unit of absorption would produce a result that was 39.8 percent off base in 2014, and even wider of the mark in 2013.