Where Multifamily Deliveries Will Break Records in 2024 and Beyond

This year, the U.S. is on track to exceed the previous record for multifamily deliveries. A new report from RentCafe shows there are almost 520,000 multifamily units expected to come online for the year, from a supply pipeline that included 1.2 million rental units under construction as of June.

Key takeaways:

• This would be the first time in at least five decades that completions will exceed 500,000 units.
• Although deliveries will slow down after this year, 2 million units are set to come online by 2028.
• Nearly 60 percent of all units expected to come online this year are concentrated in 20 metros.
• The New York metro area tops the ranking, with nearly 33,000 apartments set for delivery this year.
• The top 20 for deliveries this year includes 13 Sun Belt markets.

Multifamily demand remains elevated across the U.S., driven by migration, positive employment and consumer activity, as revealed in a separate report, Yardi Matrix’s Summer 2024 outlook. Economic growth has slowed, however. Meanwhile, construction starts are declining as well due to financing costs and tightening construction credit, the same source shows.

In this context, some high-supply markets—such as the 13 Sun Belt markets that are in the top 20 ranking for multifamily deliveries—are starting to see rent growth decelerate considerably. Apartment sale prices were also impacted, with a few exceptions, as investment slowed nationwide.

A total of 299,169 rental units are expected to come online in just 20 metro areas. Metro New York topped this list, with 32,395 units scheduled to open by the end of the year. Dallas followed closely, with 32,932 apartments.

New York administration boosts search for developable land

Earlier this month, the New York City Mayor’s Office passed an executive order to prioritize housing production on sites owned by the city. In the document, officials highlight the housing shortage and state that the city must add 500,000 new units this decade alone to meet the need.

The order establishes a new task force that will identify potential city-owned sites where new housing can be built, while also seeking the participation of additional public entities. Due to its size and given the context, it's no surprise that metro New York remains among the most active for multifamily development.

Developers completed 116,207 apartments in New York metro between 2019 and 2023, with the market ranking just behind Dallas for that time frame. It is estimated that another 150,327 units will be delivered between 2024 and 2028, which would place New York ahead of all other metros.

This year, 32,935 units are expected to come online across the metro. Three hotspots contained a large share of these—Brooklyn led activity with 9,379 apartments set to come online, followed by Manhattan (2,979 units) and Jersey City, N.J. (2,412).

Sun Belt still a hotspot for multifamily deliveries in 2024

A total of 13 Sun Belt metros made the top 20 list for multifamily deliveries in 2024. These have a combined 202,039 apartments set to come online for the year. Two Texas metros took the second and third spots—Dallas (32,932 units), followed by Austin (21,506).

Florida also stood out, with three metros making the top 20 list. Given that the state’s major metros consistently have some of the fastest-growing populations, according to U.S. Census data, demand levels have also kept high.

South Florida apartment development continued building on past performance. Miami—which earlier this year earned the distinction of the most competitive rental market—led with 14,177 units scheduled to be completed this year. The metro ranked ninth nationwide. The other two Florida metros that made the list were Tampa (11,111 units, #13) and Orlando (10,732 units, #14).

Rounding out the top five were Phoenix (21,141 units) and Atlanta (18,520), both seeing continued economic growth. Looking ahead, Phoenix is poised to remain a top contender for multifamily deliveries beyond 2024 as well. Until 2028, the metro is expected to add 60,833 apartments to its inventory.

How will multifamily completions fare past 2024?

Past this record-breaking year, trends in multifamily housing development are bound to slightly shift. The high supply in some metros already led to stifling rent movement this year, for example. Coupled with economic headwinds such as high interest rates, high costs for construction and land, the imbalance is already seriously impacting multifamily starts, which have gone down significantly since last year. Still, there are 2 million units expected to come online from 2024 to 2028.

Looking at the markets with the most increases in expected multifamily deliveries for the next five years as compared to the previous five-year interval, New York is bound to remain on top. The metro’s pipeline is expected to increase by an additional 34,120 units, for a total of 150,327 set to come online from 2024 to 2028.

A few smaller cities stood out, with major jumps in the share of new apartments set to come online. Development in Youngstown, Ohio, grew nearly 34 times from the previous five years—from 191 units completed between 2019 and 2023, to 6,449 units scheduled for completion between 2024 and 2028. Factors for this growth include the expansion of Youngstown State University and a growing tech scene.

Sherman, Texas, also saw a significant boost, as the number of units is expected to jump nearly sevenfold. The growing semiconductor hub is scheduled to add 4,001 units over the next five years, up from 617 completed in the five years ending in 2023.

Overall, 47 percent of all metros analyzed by RentCafe will see an increase in the number of new units constructed in the next five years. Phoenix followed New York in the second spot, with 11,233 more units to be added to the pipeline, while Raleigh, N.C., rounded out the top three, with 11,174 apartments.

On the other hand, a few metro areas with a great track record over the past five years will see significant drops in their pipelines. Dallas’ numbers are estimated to decrease from 128,418 units completed in the past five years to 108,178 apartments. It was followed by Houston (down 28,187 units, to 55,785) and Atlanta (down 16,356, to 57,104).