“If there were any doubts about rising vacancy in the apartment market they should now be put to rest.” That’s how Ryan Severino, senior economist and director of research for New York City-based Reis, started the company’s report on the apartment sector’s first quarter.

For the third consecutive quarter, Severino says, national vacancy rates increased, which is the longest such stretch since the fourth quarter of 2009. “This is the beginning of an upward trend in vacancy that should persist for at least the next five years,” he writes. “New construction continues to exceed net absorption by a wider margin over time, which will cause vacancy to increase in the majority (if not all) of the coming quarters. While the apartment market should still remain tight, there is clearly not a bottomless pool of demand that absorbs all of the units that are being delivered to the market.”

Nationally, vacancy was 4.5%, up 10 basis points from the previous quarter, according to Reis, with construction exceeding net absorption.

For Severino, it’s a clear indication that supply and demand are out of balance, a trend that will continue to be an issue in the coming years. “If anything, there will be greater upward pressure exerted on the national vacancy rate because construction is likely to exceed demand by an increasingly wider amount over time,” he says. “During the first quarter, construction exceed demand by 10,931 units. Although this difference is narrower than the previous quarter, it remains significant. With construction set to increase faster than net absorption this difference should continue to widen in the coming quarters.”

The first quarter of 2016 had the most units delivered (41,769) than any other first quarter since Reis began tracking the metric in 1999. Since construction is typically weaker in the winter months and a high number of units were delivered nonetheless, Severino says, “The first quarter is emblematic of the surge in construction that is now gripping the market.”

Over the last 12 months, Reis states, more than 200,000 units have been completed, the highest total since 1988.

All the while, 30,838 units were absorbed in the first quarter, a sign that Severino says indicates a slowing of the “insatiable” demand the apartment industry has seen in recent years. “While demand is not set to implode due to still-favorable demographics, more moderate demand going forward should be expected,” he says.

In the last 12 months, effective rent growth improved 4.5% and 0.5% in the first quarter, but Severino says that number should grow higher in the warmer quarters when demand for apartments is typically stronger.

On a metro level, New Haven, Conn. had the lowest vacancy rate in the U.S. with 2.1%, while ten other markets finished at less than 3%. Severino also notes that none of the top 10 markets by strongest effective rent growth are among the most expensive markets in the country.

“The rebound in the apartment market over the last six years was led by the most expensive markets, places like New York metropolitan area and Northern California,” Severino says. “However, while rents are still growing in those markets, their pace of increase is falling behind the rate of growth in some less expensive markets. Although it was impossible for those expensive markets to maintain such a torrid pace, it is nonetheless an important and instructive observation.”

Severino concludes the report in similar fashion to its start: “The party in the apartment market is not over, but all of the punch is gone and the popular people are thinking about making their exit.”