- New multifamily deliveries are expected to cool in key markets, potentially easing vacancies and stabilizing falling rents.
- The largest delivery declines are expected in Southern metros like Houston, Orlando, and Jacksonville.
- Fewer deliveries may offer a more balanced environment for multifamily investors and developers.
A recent analysis by RealPage indicates that several markets are likely to see fewer new multifamily deliveries. As reported in Globest, this trend could balance the market in key regions and provide a more favorable environment for multifamily operations.
Current Conditions
According to Moody’s, multifamily developers and investors are facing more vacancies and lower rent growth due to a surge in new inventory. The historic number of apartment unit completions in 2023 and 2024 resulted in rippling market disruptions.
Notably, the multifamily sector hasn’t been hit by a significant housing delivery dip since the Great Financial Crisis. But that might be the case much longer.
Projected Declines
Notable declines in new deliveries are anticipated to hit Southern metros the hardest. Houston leads the list of projected fewer deliveries (-31.2%), followed by Minneapolis (-37.8%), Orlando (-18.5%), Fort Worth (-21.4%), and Jacksonville (-20.5%).
Other markets with expected declines include San Francisco (-52.0%), Nashville (-8.7%), Chicago (-12.4%), Columbus (-9.5%), and St. Louis (-23.3%). These delivery cuts could help relieve some of the downward pressure on rents and vacancies in these areas.
