Dive Brief:

• Multifamily completions reached 608,000 units in 2024, the highest level since 1986, according to a National Association of Home Builders analysis of the Census Bureau’s Survey of Construction.
• Fifty-four percent of those completions were high-density buildings comprising 50 or more units. This is the eighth consecutive year those structures claimed the most multifamily openings, according to the NAHB.
• Ninety-five percent of completions were rental buildings, and 55% of those were high-density projects. In 2004, only 25% of those were larger buildings. Deliveries for buildings with 10 to 19 units decreased from 24% in 2004 to 4% in 2024. 

Dive Insight:

The number of completed multifamily units built-for-sale rose to 29,000 in 2024 — a 9,000 increase from 2023. Forty percent of those units were high density, up from 28% in 2023.

The South led the way in completions, with 292,000, accounting for 48% of the total in 2024. The West at 163,000, or 27%, was next. The Midwest, at 14% with 87,000, and the Northeast, at 11% with 68,000, followed.

“Completions in the South were weighted toward low-medium density buildings — a reverse on the overall trend — while high-density buildings in the Midwest and the Northeast were nearly double the amount of low-medium density completions,” the NAHB analysis said.

For apartment operators in the South, these completions have hindered rent growth and led to concessions, particularly in hotspots like Austin, Texas. 

Austin has stood out nationally for its apartment supply, with 23,000 units delivered between the city and nearby Round Rock, Texas, over the past two years, according to data from Yardi Matrix. In that time, rents have dropped by more than $200.

However, the situation is beginning to improve in Austin and other high-supply markets, according to Yardi Matrix’s latest National Multifamily Report.

Western and Sun Belt metros with historically high deliveries and declining rents — including Denver, San Francisco, Dallas and Austin — saw positive growth in May. In Austin, which experienced a 9.1% increase in supply this year, rents rose by 0.2% in May, or $3. 

As rents show signs of growth, these new completions could also present discount buying opportunities for apartment investors. 

“You're starting to see [distressed buying opportunities] in the greater Phoenix metro in Arizona,” Jim Brooks, president of Los Angeles-based real estate investor BH Properties, told Multifamily Dive. “You're starting to see a little bit of that in Austin — markets where you had this huge supply.” 

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