The Pullback in Apartment Construction Becomes More Pronounced | May 9, 2025

With U.S. apartment starts continuing to trail concurrent completions by record margins, the future supply pipeline for rental housing is being drained quickly.

Ongoing construction of market-rate apartments as of the beginning of 2Q comes in at roughly 585,000 units, according to stats from RealPage, Inc. That product on the way translates to 2.9% inventory growth over the near term, just half the 5.8% future stock expansion seen when ongoing building peaked at just under 1.1 million units in early 2023.

The number of big markets with notably aggressive construction volumes – let’s call it ongoing building that translates to inventory expansion of at least 5% — has been drawn down to nine. That figure is back to 2015-2017 levels, whereas 27 of the country’s 50 largest metros were about to grow their market-rate apartment stocks by 5% or more when ongoing building peaked in late 2022 to early 2023.

Where are the remaining apartment construction hot spots? Mostly in the Sun Belt, although there are a couple of exceptions that might be surprising.

Charlotte and Phoenix top the building activity leaderboard, with ongoing construction set to grow their inventories by about 8% in the near term. Expansion will hit roughly 6% across Nashville, Austin and Northern New Jersey. Markets set to experience additions equaling just over 5% of the existing stock are Columbus, Orlando, Raleigh-Durham and Dallas.

Even in these still very active construction centers, the amount of product on the way has been reduced sharply from peak volumes. In the most extreme cases, the cycle’s late 2022 to early 2023 apex of ongoing building translated to future inventory growth reaching 17.9% in Austin, 16.7% in Charlotte, 16% in Nashville and 15.6% in Raleigh-Durham.