A wave of new apartment deliveries is expected to bring between 525,000 and 600,000 multifamily units to the U.S. rental market in 2025, an influx reflecting the completion of developments launched during the building boom of recent years, even as new construction starts fall sharply from pandemic-era highs.
In 2025, multifamily completions are expected to reach between 525,000 and 600,000 units, keeping deliveries near the highest levels seen in decades as projects started during the 2021–2023 boom come to market, according to a report from RealPage. Despite the influx, construction starts have sharply declined—now 40% below their 2022 peak—reflecting developers’ caution amid higher interest rates, steeper construction costs and a backlog of recently finished, lease-up properties. Forecasts anticipate multifamily starts to fall again in 2025 to roughly 316,000 to 317,000 units, setting the stage for a considerable contraction in new supply over the next two years.
The rental market remains resilient, with demand continuing to run above long-term averages. While rent growth persists, it is expected to moderate, with most major forecasters projecting national rent gains of 2–2.2% for 2025—below the typical 2.8% historical norm. Vacancy rates, by contrast, are forecast to edge up to around 6.2%, reflecting the lagging effects of elevated new supply. In markets like the Sun Belt and Mountain West, where construction has been most concentrated, operators face especially high competition and may offer further concessions, while more supply-constrained markets like the Midwest and major coastal metros are expected to see stronger performance.
Despite economic headwinds, investor sentiment appears to be cautiously optimistic moving into the second half of 2025. Rising permit activity suggests longer-term confidence even as near-term starts slow, and demand is underpinned by stubbornly high home prices and mortgage rates that continue to sideline would-be buyers in favor of renting.
The overall outlook for 2025 is a nuanced one: with deliveries at or near all-time highs, a retreat in new project starts, softening but still-positive rent growth and a slight rise in vacancies. By the year’s end, most experts expect the unprecedented supply wave to have peaked, paving the way for market normalization and a much tighter construction pipeline heading into 2026.
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