Yardi Matrix Increases Multifamily Completion Forecast for 2024, 2025

(Image courtesy of Yardi Matrix)

Yardi Matrix, Santa Barbara, Calif., reported multifamily construction starts increased slightly in the third quarter, and overall construction levels should yield an uptick for 2024 and 2025 completions.

Yardi Matrix’s Multifamily Supply Forecast found the under-construction pipeline increased 7.6% in the third quarter, and updated its forecast completions for 2024 (up 5.8%) and 2025 (up 6.2%).

However, it cautioned its forecast for 2026, 2027 and 2028 is down, following a predicted mild recession. The planned pipeline plateaued in Q3, and the prospective pipeline continues to slow.

Moreover, Yardi Matrix acknowledged, the new U.S. Census Bureau residential construction statistics reveal a contraction in starts in August.

There are just over 1.2 million units in the under-construction pipeline currently, with 479,634 in lease-up.

On a year-over-year basis, the report posited multifamily construction starts peaked in the second quarter of 2023. It identified almost 313,000 units started in the first half of the year. The trailing four-quarter average for starts is at 164,373 for the third quarter, with a peak in Q1.

Construction completion times for garden apartments was 722 days in the quarter, up from the four-quarter average of 682 days. For mid-rise apartments, it stood at 760 days, above the four-quarter average of 748 days.