The next two years are expected to see the completion of 1 million new rental housing units, according RentCafe’s annual Apartment Construction Report.
Tapping into data from its sister company Yardi Matrix, RentCafe is forecasting 460,860 new apartments to open this year, followed by 484,000 new units in 2024 and a slowdown in 2025 to 408,000 units to be built.
New York City will be the leading metro for apartment construction, according to the new report, with no less than 33,000 new rental units set to come online by the end of the year – with the majority located in Brooklyn (9,825 units), followed by Queens (4,430 new rentals) and Manhattan (3,770 new apartments). Other markets expecting a boost in apartment availability include the Dallas metro area with 23,659 new rentals by year’s end, Austin with 23,434 new rentals and the Miami metro with 20,906 units in total.
However, 60% of the new units built from 2020 to 2022 are accessible to only 41% of the renter population – RentCafe determined that pandemic-era apartment boom was clustered in just 20 high-growth metros, thus leaving many places undersupplied, while 89% of the apartments completed in the last three years were high-end offerings rather than affordable housing.
And looking into 2025 and beyond, the multifamily building flurry is expected to slow.
“Tightening of bank lending standards — combined with rising costs of construction materials, labor and land — has made new projects harder to pencil,” said Doug Ressler, manager of business intelligence at Yardi Matrix.