New York City and Dallas Lead the 2024 Apartment Construction Boom

The apartment construction industry is set to break records in 2024, with an unprecedented 518,108 rental units expected to be completed.

This marks the first time the number of new units will surpass the 500,000 mark, according to a recent study by RentCafe.

This surge represents a 9% increase from 2023 and a staggering 30% rise from 20221. Looking further ahead, a total of 2 million apartments are projected to be completed by 20281. Leading this construction boom for the third consecutive year is New York City, which will add 32,935 units, narrowly outpacing the Dallas metro area, set to add 32,932 units. Austin, Texas, follows with 21,506 new units.

Key Players in the Construction Surge

Together, Dallas and Austin will account for approximately 10% of all new apartments completed in 20241. Nearly 60% of the new supply is concentrated in the top 20 metro areas, highlighting the significant role these regions play in the national housing market.

Phoenix, Arizona, and Atlanta, Georgia, round out the top five metro areas for apartment construction, with 20,141 and 18,520 units, respectively. Despite the record number of new units, rent reductions may be limited as most new constructions are upscale projects.

Future Trends and Market Dynamics

Post-2024, the pace of construction is expected to decelerate.

Apartment starts have already slowed this year and are projected to continue this trend into 2025, with 440,478 new units expected. By 2027, this number is anticipated to drop to 319,000 units. However, a rebound is expected in 2028, with around 319,000 new apartments, marking a 23% year-over-year increase.

U.S. Census and HUD data indicate a decline in multifamily housing starts through much of 2023 and into 2024, compared to the robust activity of 20221.

This trend underscores the shifting dynamics in the apartment construction market.

The 2024 apartment construction boom, led by New York City and Dallas, signifies a pivotal moment in the housing market. As the industry navigates through fluctuating trends and economic conditions, these developments will play a crucial role in shaping the future of urban living.