- The U.S. is on track to add over 500K new apartments in 2024, 9% more than 2023 and 30% more than 2022.
- New York, Dallas, and Austin are top markets for new apartment deliveries, accounting for nearly 10% of all new units.
- Slower construction is expected in 2025, with more than half of 370 studied markets predicted to cool down.
- By 2028, 2M new apartments are expected nationwide, although high borrowing costs could shift strategies.
According to a study by RentCafe, the U.S. apartment market is set to witness a historic year in 2024, with over 500K new apartments expected.
That’s 9% more than in 2023 and a 30% jump from 2022, bringing much-needed inventory to a housing market grappling with supply constraints.
To put things into perspective, the influx of new apartments could house the population of Atlanta, as reported in Globest.
Key Markets
For the third consecutive year, New York tops the list with nearly 33K new units expected to come online, driven by significant growth in Brooklyn, which will add three times as many units as Manhattan. The Northeast’s persistent housing shortage continues to fuel the surge.
Texas has also emerged as a leader in apartment construction, with Dallas and Austin securing the #2 and #3 spots, respectively. Dallas, with its strong population growth, business-friendly environment, and affordable housing relative to other large metros, will add almost as many units as New York. Austin is expected to deliver over 21.5K units.
Phoenix and Atlanta round out the top five markets nationally. Phoenix is expected to add over 20K new apartments, and Atlanta is close behind with 18.52K.
Slowdown Looms
Despite record levels of growth anticipated by EOY, the pace of new apartment construction is expected to slow down in 2025. RentCafe’s study suggests that more than half of the 370 markets are likely to see a slowdown in activity.
Developers are also facing down higher borrowing costs and economic uncertainty, which likely means many will have to reassess their strategies and focus on lower-risk projects in high-demand areas.
Looking Ahead
Although a slowdown is expected in the short term, the long-term outlook remains strong, with 2M new apartments projected to be completed by 2028.
However, the dominance of high-end apartments in new developments, coupled with rising borrowing costs, may limit affordable housing options for renters in many markets.
