The multifamily sector could be on the cusp of a new supply cycle following a two-year period of slower permitting across the country.
Most multifamily markets hit permitting peaks in the first quarter of 2023, according to a RealPage analysis. Meanwhile, some like Austin and Orlando reached theirs a bit earlier, in 2022, but have maintained relatively high levels of permitting for longer periods, the report said.
Since September 2024, Dallas and Houston, two of the nation’s top apartment development markets, have seen their annual multifamily permitting totals increase each month. Orlando’s activity began increasing in November. Austin and Phoenix both showed slight upticks in annual totals in May compared with April, according to RealPage.
It is still early to accurately forecast the end of the current cycle’s trough and the beginning of the next supply cycle, given development costs, lending availability and market uncertainty, RealPage explained.
Nine of April’s top 10 markets for multifamily permitting returned in May, with Newark replacing Washington, D.C, on the list. The top 10 includes markets that had both increases in the category, as well as decreases.
New York led the top 10 with 26,253 units approved in the year ending in May, an increase of 2%. Dallas was second with 15,083 units, up 8%, and Houston took third with 14,426 units permitted, an increase of nearly 23%.
However, some others on the list experienced drops. For example, Austin had the fourth highest number of units permitted at 13,082, representing a 35% decrease. Phoenix's fell 26% to 12,488 units, Atlanta's slipped17% to 10,947 units and Newark's fell 37% to 9,465 units. Columbus and Los Angeles rounded out the top 10 markets for multifamily permitting, with 9,348 and 8,288 units, up 38% and down 34%, respectively.
Other markets with significant year-over-year decreases in annual multifamily permitting in May included Washington, D.C., Tampa, San Jose, Miami, Nashville, San Diego and Salt Lake City. Others with the opposite trend included Chicago, Fayetteville, Arkansas, Anaheim, Bridgeport, Connecticut, Savannah, Richmond, Des Moines and Augusta, Georgia.
Last month’s top permitting market, Brooklyn, dropped by about 300 units, while Columbus and Austin increased permitting by more than 1,000 units each. The Bronx approved nearly 1,000 units.
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