Permits to Build U.S. Apartments in 2024 are Down Approximately 30% Since the Pandemic

Redfin, the Seattle-based, technology-powered national real estate firm reported on Tuesday (7-9-24), that builders obtained permits to construct 13 multifamily housing units for every 10,000 people in the U.S. so far this year, down nearly 30% from an average of 18 during the same periods in 2021-2023.

The report is based on a Redfin analysis of U.S. Census Bureau data covering building permits for multifamily units in buildings with five or more units during the first five months of 2024, and the same periods in 2021-2023. National figures cover the entire U.S., while the metro sections below cover the 79 U.S. metros with populations of at least 750,000.

Redfin notes that while multifamily building permits and starts have slowed significantly—both have fallen below their 10-year historical average—the number of units being completed is still at historic highs. That’s because a lot of projects that started during the pandemic are just now being finished. This backlog of new units means property owners in many areas are competing with one another for tenants, which is putting a cap on how much U.S. rent prices can grow. Asking rents are up less than 1% from a year ago—a far cry from the 18% growth seen during the pandemic—though they are still at the highest level since 2022.

Adding additional background to the report, as well as his expert analysis, Redfin’s Senior Economist, Dr. Sheharyar Bokhari – Ph.D. – Economics said, “Prospective renters should be aware that now may be a better time to sign a lease than later. Property owners might start jacking up rents again once all of the new apartments hitting the market fill up with tenants and there’s no longer so much supply, which could be the case in a year or two.”