RentCafe: New Apartment Construction Still Strong
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RentCafe, Santa Barbara, Calif., released its latest apartment construction report, forecasting that 506,353 units will be opened nationwide by the end of the year.
That number is below the record-breaking new apartment construction from 2024, but above historical averages since 2015.
More than 52% of the new apartment units are being built in the South, at an estimated 265,613. The growth is driven by the large influx of people and capital moving into the Sunbelt region over the past decade or so, particularly in Texas and Florida.
Texas is on track to open 81,407 new apartments this year, and Florida is headed toward 62,184.
“Southern metros typically offer streamlined approval processes and fewer regulatory hurdles, making it easier to bring multifamily projects to market. At the same time, elevated home prices and a shortage of attainable for-sale housing are pushing more residents toward rentals,” said Doug Ressler, senior analyst and manager of business intelligence for RentCafe parent company Yardi Matrix. “For many households, single-family (housing) ownership is simply out of reach–fueling demand for rental housing.”
The West will see 125,629 new apartments by the end of 2025, per RentCafe’s forecast. California and Arizona are leading the region.
The Midwest is anticipated to see 58,590 new units, with Ohio and Indiana seeing the most growth.
And, the Northeast will see 56,521 new units, dominated by New York and New Jersey.
Despite the pop of southern rental abodes, the New York metro area leads others in apartment deliveries, with 30,023 new apartments set to open this year. Dallas is the No. 2 metro area, with 28,958 new apartments expected, followed by Austin, Texas, at No. 3 and 26,715 units.
Looking at new apartments within city limits alone, Austin tops the list, followed by Charlotte, N.C., and Houston.
Metros that saw the largest year-over-year increases in construction include Naples, Fla., where completions are up 275% from 2024. Next is Birmingham, Ala., up 198.1% year-over-year and Riverside, Calif., up 154.1%.
As for metro areas that have seen drops in new apartment construction over the past year, Chicago leads the pack, down 60.4% year-over-year. Next are Madison, Wis., (down 59.3%) and Minneapolis (down 56.5%).
