Apartments are being constructed at a record pace across the U.S. this year. According to a new report from RentCafe, 420,000 new apartments are expected to be completed by year’s end, and multifamily apartment construction in the last two years is at a 50-year high. Both are welcome indicators in the midst of an ongoing housing supply shortage.
According to the report, which ranks metros by new construction, the New York City metro area is poised to surpass the Dallas-Fort Worth metro area and claim the top spot before the end of the year (a spot it last held in 2018). Despite bleeding residents during the pandemic, the Big Apple is expected to deliver 28,153 brand-new apartments in 2022, almost 50% more than in 2021.
The uptick in construction is being driven by a number of factors, including greater demand for rentals since homeownership has become implausible in the short term for many as inflation and interest rates remain heightened.
Among the report’s key findings:
- The Miami metro, the nation’s most competitive rental market, climbed back to third place, surpassing cities like Houston and Austin, which have experienced construction booms in recent years.
- Half of the top 20 metro areas are estimated to hit their five-year peaks in apartment deliveries this year, including Nashville and Portland.
- Nashville, Chicago and Portland were all newcomers in the top 20 metros.
- Boston, San Jose and Kansas City were all knocked off the list this year as their rates of construction cooled.
“The construction industry is finally returning to pre-pandemic levels of activity but is still being hampered by three familiar challenges: labor shortages; material costs and availability; and supply chain issues,” said Doug Ressler, manager of business intelligence at Yardi Matrix.
Read the full report here.