In the last three years, the pandemic building boom has brought 1.2 million apartments online, and, by the close of December, another 460,860 are expected to have opened this year, according to RentCafe’s annual Apartment Construction Report.
“However, almost two-thirds of the apartments built during the pandemic boom are clustered in just 20 high-growth metros, which make up about 41% of the total renter population in the U.S. Therefore, for many other places, the new supply barely made a dent in the existing supply,” the report reads. Dallas, New York, and Houston have ranked as the top three metros for apartment construction since 2020.
Emerging as a top builder for 2023, the New York metro is expected to complete 33,000 new rental units by year’s end, while Brooklyn alone is set to deliver 9,825 of the 33,000 units.
Based on Yardi Matrix data, deliveries are expected to remain elevated until 2025, with another 1 million new rentals set to be completed through then. Between 2020 and 2022, the Dallas metro opened 76,660 units and is slated to build 23,659 units by the end of the year, with Dallas proper adding 4,176 of those units.
The Austin, Texas, metro is set to open 23,434 new rentals by the end of this year with over half, 12,692 units, being concentrated in Austin proper. At a city level, Austin and Houston both topped the chart for most apartments built in 2020 to 2022.
Ranking fourth for most new apartments set for completion by the end of 2023, the Miami metro plans for 20,906 units. Many of the new rentals, 9,362 units, will be in Miami proper. The Atlanta metro rounds out the top five and is on track to complete 18,408 rental apartments this year, with nearly half located in Atlanta proper.
As the current economic headwinds begin affecting construction, supply growth is predicted to slow after the current projects are completed. The number of new apartments is expected to drop by 15% year over year, estimating 484,000 in 2024 to 408,000 in 2025. In 2026, new completions are expected to bottom out at 400,000 units before gradually recovering in the following two years, Yardi Matrix estimates.