Developers obtained permits to build 12.4 multifamily housing units for every 10,000 people in during 2024, according to a new data report from Redfin (NASDAQ: RDFN). Last year’s figures marked a 27.1% decline from 17 units per 10,000 people during the pandemic-era building boom, and it was also down 5.5% from 13.1 units in the pre-pandemic years.
Remote work during the pandemic fueled a surge in rental demand as Americans began relocating to more affordable markets, particularly in the Sun Belt. This resulted in a record number of new apartments being completed in 2024.
Redfin noted that 63% of major metros have posted a decline in multifamily permits since the pandemic. But that’s not to say the entire nation has seen a slowdown in multifamily permits. The Texas capital of Austin granted permits to build 64.5 multifamily units for every 10,000 people over the past year, the highest level among the nation’s major metro. Four more Sun Belt metros also recorded high levels of permitting: Cape Coral, Florida (59.6), North Port, Florida (53.3), Raleigh (41.1) and Orlando (40.7).
At the other end of the spectrum, Stockton, California, recorded no new permits in the past year—the lowest of the metros analyzed. Next came Bakersfield, California (0.8 units per 10,000 people), El Paso, Texas (1.6), Providence, Rhode Island (1.6) and Baton Rouge, Louisiana (1.9).
Redfin blamed the slowing of multifamily construction on a combination of flattening rents and higher borrowing costs.
“New apartments are being rented out at the slowest speed on record, and builders are pumping the brakes because elevated interest rates are making many projects prohibitively expensive,” said Redfin Senior Economist Sheharyar Bokhari. “At some point in the next year, the slowdown in building will mean that renters have fewer options—potentially leading to an increase in rents.”
