America's new apartment wave is peaking
Add Axios as your preferred source to
see more of our stories on Google.
A record half-million-plus new apartment units are expected to be built this year, but the pipeline is slowing.
Why it matters: The projected cool-down comes as a national shortage of homes to buy or rent is keeping housing prices high.
The big picture: A rush of new apartments, financed when interest rates were lower, helped recently to ease rent hikes.
Reality check: Most new apartments are amenity-packed and perched in sweet locations — not the affordable rentals many people want.
- The average U.S. asking rent in larger properties with multiple units cost roughly $1,700 in Q2, 19% higher than pre-pandemic levels, according to CoStar Group data.
Between the lines: Several major U.S. metro areas are on track to build fewer units in the coming years than they did during the COVID boom, per a recent analysis by RentCafe.
- Some areas that led the upturn, including Houston and Minneapolis, are expected to see the biggest drops in completions between 2024 and 2028 compared to the previous five years.
What's next: As people postpone house purchases, less new apartment construction paves the way for landlords to raise rents.
