Alchemist City

Record-High Apartment Construction Forecast for 2024

Mike Colagrossi

Record-High Apartment Construction Forecast for 2024

Mike Colagrossi

The U.S. apartment market is set for a historic year, with developers expected to deliver around 518,000 new units by the end of 2024, marking the highest level of new apartment construction on record, according to RentCafe.

  • Top Markets: New York City and Dallas are leading the charge, with each city expected to bring over 32,900 new apartments to the market. New York remains the frontrunner for the third consecutive year, while Dallas is just three units behind.
  • Regional Insights: The concentration of new construction is heavily skewed, with nearly 60% of all new units clustered in the top 20 most active markets. Cities like Austin, Phoenix, and Atlanta are also seeing significant activity, with each poised to add tens of thousands of new apartments.

Long-Term Projections: Between 2024 and 2028, approximately 2 million new apartments are expected to be built across the U.S. Notably, 47% of the 369 metro areas analyzed are projected to surpass their previous five-year construction rates, indicating continued strong demand.

Despite the current boom, the pace of new apartment completions is expected to slow considerably after 2024. Rising borrowing costs, driven by higher interest rates, are already making it more difficult for developers to finance new projects. This is likely to lead to a 15% drop in new deliveries by 2025, with further declines anticipated through 2027.

Urban Building: The current surge in construction is a response to the ongoing housing shortage, particularly in high-demand urban areas. However, the expected downturn in completions raises concerns about future supply, especially as the U.S. needs an estimated 4.3 million new apartment units by 2035 to keep up with demand and maintain affordability.

Developers may increasingly focus on safer projects and stronger markets. Despite the construction boom, most new apartments continue to target middle- and higher-income renters, leaving affordability concerns unaddressed.

Related posts

Scroll to Top