US Sees Record Apartment Construction, Bringing Relief to Real Estate Market
The surge in apartment supply is expected to moderate rent-price increases and offer buyers some relief on home prices.
Real EstateApartment ConstructionSun Belt CitiesHousing MarketRent PricesReal Estate NewsSep 28, 2024
The Sun Belt cities, such as Dallas and Austin, are driving the record apartment supply, with a huge population influx in the last few years. The ease of building and getting permits in these regions has added to their appeal. Dallas and Austin are seeing record apartment supply, with the two metros making up 10% of new apartments coming to market nationwide.
The increased supply has led to rent prices falling or remaining stagnant in these cities. In Austin, the median rent price fell 8.4% year-over-year this month, according to Zillow data. However, experts warn that this relief is temporary.
As builders saw the surge in construction, they realized prices were on an unsustainable ascent, so they pulled back on new permits and construction starts. This means the market will eventually balance itself in the next few years, leading rent prices to rise again.
Frequently Asked Questions
What is the record number of apartment constructions expected to be completed in the US this year?
518,108 rental units
Which cities are driving the record apartment supply?
Sun Belt cities, such as Dallas and Austin
What is the expected impact of the increased apartment supply on rent prices?
Rent prices are expected to fall or remain stagnant in the short term, but rise again in the long term
Why are builders pulling back on new permits and construction starts?
Builders realized prices were on an unsustainable ascent, so they pulled back on new permits and construction starts
What is the long-term outlook for the housing market?
The market will eventually balance itself, leading rent prices to rise again, and buyers will need to adapt to the changing market conditions
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