US Building Permits for Multifamily Construction Fall Below Pre-Pandemic Levels

On Friday, Redfin reported that according to its analysis of US Census Bureau data covering building permits for multifamily units in buildings with five or more units, developers obtained permits to build 12.4 multifamily housing units for every 10,000 people in the US over the past year.

That is down 27.1% from 17 units per 10,000 people during the pandemic building boom and down 5.5% from 13.1 units in the years leading up to the pandemic.

Remote work during the pandemic allowed scores of Americans to relocate, leading to a surge in rental demand, according to Redfin. Builders ramped up construction in response—particularly in high-demand Sun Belt metros. That led to a record number of new apartments being completed in 2024. Now, however, rents are flattening and borrowing costs are high, making building less attractive.

Commenting on the report, Redfin Senior Economist Sheharyar Bokhari said:

“New apartments are being rented out at the slowest speed on record, and builders are pumping the brakes because elevated interest rates are making many projects prohibitively expensive. At some point in the next year, the slowdown in building will mean that renters have fewer options—potentially leading to an increase in rents.”