Dive Brief:
- New U.S. apartment construction is expected to reach a record high this year, with developers on track to deliver an estimated 518,108 units by the end of 2024, according to a report by RentCafe.
- Nearly 60% of the expected deliveries are clustered in the 20 most active new multifamily construction markets. New York City leads the list for the third year in a row, with an estimated 32,935 units expected to come online. Dallas’ estimate is only three units behind at 32,932.
- Looking ahead, approximately 2 million new apartments are expected to be available in the U.S. between 2024 and 2028. Nearly half — 47% — of the 369 metros analyzed in the report are likely to build more apartments in this period than they did between 2019 and 2023.
Dive Insight:
While the market is currently riding the peak of the supply wave, RentCafe expects that new completions will drop significantly in the near future. Approximately 440,000 new deliveries are expected in 2025, down 15% from 2024, followed by 332,000 in 2026 and 319,000 in 2027 — a 10-year low.
Higher borrowing costs have made it more difficult for developers to start new projects over the last several years, starting in late 2022 when the Federal Reserve began raising interest rates to combat inflation. This may drive developers to focus on lower-risk projects or shift toward stronger markets for development, according to RentCafe.
“Most markets won't see the impact of rapidly falling starts translating to lower completion levels until the second half of 2025, and more likely in 2026,” Doug Ressler, senior analyst and manager of business intelligence at Yardi Matrix, RentCafe’s parent company, said in the report. “All said, this massive drawdown in starts across all regions sets the stage for a very different industry trajectory come 2026 and 2027.”
The report notes that the majority of apartments built in the last five years, as well as those under construction, are high-end projects that cater to middle- and higher-income renters.
Top 20 US metros for estimated new apartments in 2024
| Metro | Estimated new apartment deliveries in 2024 |
|---|---|
| New York City | 32,935 |
| Dallas | 32,932 |
| Austin, Texas | 21,506 |
| Phoenix | 20,141 |
| Atlanta | 18,520 |
| Houston | 18,301 |
| Washington, D.C. | 15,079 |
| Charlotte, North Carolina | 14,658 |
| Miami | 14,177 |
| Denver | 12,913 |
| Nashville, Tennessee | 12,192 |
| Seattle | 11,842 |
| Tampa, Florida | 11,111 |
| Orlando, Florida | 10,732 |
| San Antonio | 9,617 |
| Raleigh, North Carolina | 9,228 |
| Los Angeles | 8,924 |
| Minneapolis | 8,400 |
| Boston | 8,022 |
| Portland, Oregon | 7,499 |
SOURCE: RentCafe
New York City is one of only two Northeastern metros in the top 20 for new apartment construction this year — the other being Boston at No. 19 with 8,022 units. The majority of New York’s new apartments, almost 10,000, are concentrated in the Brooklyn borough. This construction boom is attributed to the housing shortage in the Northeast.
As for the Dallas metro, its strong population growth, business-friendly environment, affordability and strong infrastructure are driving both construction projects and corporate relocations, the report said.
The U.S. needs 4.3 million new apartment units by 2035 in order to mitigate issues related to apartment demand and affordability, according to an August 2022 report commissioned by the National Apartment Association and National Multifamily Housing Council.
Based on RentCafe’s delivery data and estimates, approximately 2.87 million units are expected to come online between 2022 and 2028. Approximately 1.43 million more would be needed between 2029 and 2035 to meet the report’s estimate.
