This year, the U.S. is on track to see an impressive surge in apartment construction, with a projected 518,108 new rental units slated for completion by 2025, according to a recent RentCafe study.
This figure reflects a 9% increase from 2023 and an impressive 30% jump compared to two years ago.
Texas is at the forefront of this building boom, boasting four cities in the top 20 U.S. metros for new apartments, including two of the top three spots. New York City leads with a staggering 32,935 new units, followed closely by Dallas with 32,932 upcoming rentals. Austin, once a pandemic hotspot, ranks third with 21,506 units expected before 2025. Together, these Texas metros anticipate accounting for about 10% of the total apartments built in the U.S. this year.
Data for these figures was compiled by RentCafe in collaboration with its sister company, Yardi Matrix.
The robust construction in Texas is driven by ongoing demand, fueled by factors such as corporate relocations and high home prices. Doug Ressler, senior analyst at Yardi Matrix, noted that other regions are experiencing a slowdown in new construction due to the current economic climate.
Dallas, in particular, has seen a consistent population growth post-pandemic, welcoming over 150,000 new residents within a year thanks to its appealing business environment and affordability compared to similar-sized cities. This influx of new workers promotes economic growth and heightens the demand for housing.
Despite recent fluctuations, Austin still ranks as the second fastest-growing metro in the country due to its strong job market across tech, healthcare, and hospitality sectors. Even as prices rise, apartments in Austin remain more budget-friendly than those in pricier markets like San Francisco or New York.
Nationally, the housing market faces a significant shortage, a lingering issue from underbuilding in the years following the 2007-2008 financial crisis. This shortage has inflated housing prices, especially during the pandemic when demand soared. While housing inventory has increased recently, particularly in states like Florida and Texas, it still falls short of meeting current demand. As of July, the total number of homes for sale was 1,635,395—slightly down from June yet up 13.7% from a year prior.
Here’s a snapshot of the top 20 U.S. metros where the most new apartments are expected to be completed by the end of the year:
- New York—32,935
- Dallas—32,932
- Austin, Texas—21,506
- Phoenix—20,141
- Atlanta—18,520
- Houston—18,301
- Washington, D.C.—15,079
- Charlotte—14,658
- Miami—14,177
- Denver—12,913
- Nashville—12,192
- Seattle—11,842
- Tampa, Florida—11,111
- Orlando, Florida—10,732
- San Antonio—9,617
- Raleigh, North Carolina—9,228
- Los Angeles—8,924
- Minneapolis—8,840
- Boston—8,022
- Portland, Oregon—7,499