U.S. apartment construction activity has fallen to its lowest point in nearly a decade, just two years after peaking at more than 1.1 million units underway during the first quarter of 2023. Since then, building volumes have declined every quarter as construction projects have been completed and permitting began to slow, according to a RealPage Market Analytics report.
Roughly 543,000 units were under construction at the end of the second quarter this year, which represents the smallest apartment construction rate the nation has seen since the third quarter of 2015. Nationwide apartment construction activity fell by nearly 320,000 units in the past year, representing a 37% decrease from the volume during the second quarter of 2024. Of the stock currently underway, 65%, or 354,000 units, are scheduled to wrap up in the coming year.
Austin has experienced the largest decline in apartment construction activity over the past year. Only 18,000 units were underway at the end of the second quarter in the city, less than half the volume seen a year ago.
Phoenix, Atlanta, Dallas and New York also saw a notable decrease in construction volume during the past year, with each market dropping between 14,000 and 17,000 units year-over-year. Denver’s annual apartment construction dropped 58% annually, while Charlotte, Washington, Raleigh and Newark also posted significant declines in construction volume.
A handful of markets posted relative construction drops of more than 60% over the past year, mostly West Coast markets like San Jose, Oakland and Portland. Midwest market, Indianapolis, is also included in that list.
Meanwhile, the markets with the biggest volumes of apartments underway at the end of the second quarter included New York, Dallas, Phoenix, Newark and Los Angeles. All of these markets have seen construction activity fade, however. That comes as a small group of markets is seeing activity increase from last year’s pace. These include Cincinnati, Richmond and West Palm Beach.
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