Builders obtained permits to construct 13 multifamily units for every 10,000 people in the nation in the first five months of 2024. This is down nearly 30% from an average of 18 units during the same periods in 2021 to 2023, according to a new report from Redfin.
However, while the number of multifamily building permits and starts have fallen below their 10-year historical average, the number of units being completed continues to be at a historic high. According to Redfin, this backlog of new units means owners are competing with one another for renters in many metros, which is putting a cap on how much rent prices can grow.
“Prospective renters should be aware that now may be a better time to sign a lease than later,” said Redfin senior economist Sheharyar Bokhari. “Property owners might start jacking up rents again once all of the new apartments hitting the market fill up with tenants and there’s no longer so much supply, which could be the case in a year or two.”
Redfin analyzed U.S. Census Bureau data for multifamily permits for buildings with five or more units in 79 metros over the first five months of the year. It found Cape Coral, Florida, and Austin, Texas, are permitting more multifamily housing than anywhere else in the nation.
Builders in Cape Coral got permits to construct 27 multifamily units per 10,000 people so far this year, while Austin builders got permits to construct 21 units per 10,000 people.
Redfin noted that Florida is home to four of the top metros for building permits so far this year. In addition to Cape Coral, North Port, Tampa, and Orlando made the top 10.
“Florida faces high risk from storms, flooding, and sea level rise, and is the epicenter of the housing insurance crisis,” according to the report. “But builders keep building because there’s still demand—partly due to the influx of out-of-towners who moved in during the pandemic.”
Two metros with the fewest multifamily permits per 10,000 people were in California. Stockton and Bakersfield had no multifamily permits issued during the first five months of 2024.
Even though Austin was the second largest permitter for multifamily units in the first five months, it had the largest dropoff since the pandemic, when the Texas capital saw an average of 40 units per year in 2021 to 2023. Jacksonville, Florida, also saw significant slowing, with permits dropping from 23 units per 10,000 people in 2021 to 2023 to five permits per 10,000 people in the first five months of 2024.
However, the report found that 25 metros were permitting more than they were during the pandemic years of 2021 to 2023. Greensboro, North Carolina, saw the largest increase, obtaining 20 multifamily permits for every 10,000 people in the first five months of 2024 versus an average of just four in 2021 to 2023.
