The apartment construction development pipeline remains strong, according to the recent Multifamily Supply Forecast Research Bulletin by Yardi Matrix. Newly completed apartment units will increase by 3.3 percent in 2025, and by 11.5 percent in 2026, followed by a gradual decline to 4.3 percent in 2027.
Multifamily construction starts declined by 40 percent in the first three quarters of 2024, compared to the first three quarters of 2022 and 2023. This slowdown has begun to affect the under-construction pipeline, with 11.7 million units under construction in fourth quarter 2024, showing a drop of 7.2 percent year-over-year.
Long term, the forecast shows that as interest rates remain elevated, tight new development financing and long development lead times will cause starts to remain at the same level in 2025 as seen in 2024, and ultimately resulting in new supply bottoming in 2027, according to the report.
New development is expected to rebound in 2026,
