Apartment construction at a 20-year high
More than 345,000 new apartments are scheduled for delivery this year in large-scale developments across the United States, the highest level in 20 years, according to Yardi Matrix, a subsidiary of Rent Café. In 2016, there were 285,839 apartment completions and in 2015 there were 261,080 apartment completions.
New York City leads in apartment construction with 26,700 units projected to be completed in 2017. Dallas-Fort Worth has 24,960 units scheduled for completion in 2017, and Houston has 17,960 .
The wave of new construction is helping to lower rents in overheated markets, including San Francisco, New York City and Boston.
After peaking in 2014 at 5.1 percent, national monthly rents rose just 1.5 percent to $1,316 in May, the lowest annual growth rate in more than three years. In 2017, the average U.S. rent is expected to increase a modest 3.9 percent.
According to Rent Café, rents in San Francisco are at their lowest level in the past two years. Rents in May 2017 were $2,497 in the S.F. metro, a meager 0.5 percent increase year-over-year. By comparison, in May 2016 annual increases stood at 6.2 percent and a year before rent growth was in double digits, approximately 11.9 percent.
The demand for apartments is high and growing. And according to the National Multifamily Housing Council and National Apartment Association, the country needs to construct 4.6 million new apartments by 2030.
To read the full Yardi Matrix report, click here.