Aug 22, 2022 - Economy

New apartment construction to match 50-year high

Residential buildings along the East River in New York City on Aug. 17.

Residential buildings along the East River in New York City on Aug. 17. Photo: Ismail Ferdous/Bloomberg via Getty Images

Some 420,000 new apartments are expected to be completed in cities across the U.S. this year, marking a historic 50-year high in multifamily construction, according to data from the listing service RentCafe.

Why it matters: The new supply of units could eventually bring down rental prices, which have recently soared alongside housing prices, making it more difficult for people to find an affordable place to live.

By the numbers: 2022 is expected to be the second year in a row in which more than 400,000 apartments were completed, with 423,000 delivered nationwide in 2021, according to RentCafe.

  • The last time the apartment completions surpassed 400,000 units, barring 2021, was in 1972.
  • RentCafe said the construction boom was likely being driven by high inflation and increased housing prices and interest rates.

The big picture: The New York metro is projected to complete the most new apartments in 2022, with 28,153 units expected to be finished.

  • Dallas-Fort Worth is set to come in second with 23,571 units, followed by Miami with 19,125 apartments.

Yes, but: Despite of 2021's historic construction boom and the projections for 2022, rental prices still appear to be skyrocketing.

  • Apartment listing service Apartment List's national rental index rose by 1.1% over the course of July, and year-over-year rent growth currently stands at 12.3%.
  • It said rental prices are rising slower than they did in 2021 — during which the median rent increased by a record 17.6% over the course — but faster than they did in the years before the pandemic, according to Apartment List.

Go deeper: Why rents are soaring pretty much everywhere in the U.S.

Go deeper