US Multifamily Starts Decline in Q1

According to a new report from Apartments.com and CoStar, new apartment construction starts fell to 55,000 units in Q1, down 73% from their 2022 peak, amid a continued pullback in new development as market conditions remain challenging.

A total of 579,000 apartment units were under construction in Q1, down more than 50% from the peak reached in early 2023 and roughly in line with mid-2010 levels.

“Developers have pulled back sharply as weaker rent growth and higher financing costs weigh on project feasibility,” said Grant Montgomery, National Director of US Multifamily Analytics at CoStar. “While completions remain elevated for now, the contraction in the construction pipeline points to more balanced supply conditions ahead.”

The market is still absorbing completions from projects financed earlier in the cycle, although delivery volumes have begun to ease, CoStar said. Annual apartment deliveries peaked in 2024 and have declined by about 26% over the past four quarters.