New Apartment Deliveries Expected to Peak in 2024

Apartment supply reached a 36-year high in 2023, the culmination of construction projects that started back when occupancy rates and rent growth neared record highs. Yet by the time the projects completed, their operators faced a very different leasing environment, RealPage reports.

Nearly 440,000 units completed in 2023, and another 671,000 are scheduled to deliver in 2024, according to RealPage data. After that, completions will plunge dramatically due to the recent slowdown in starts linked to higher financing costs and softer fundamentals, the firm reported.

“High supply is great news for renters and a hurdle for investors,” said RealPage chief economist Jay Parsons. “Renters suddenly have far more options than they’ve had in recent years, and that’s putting downward pressure on rent growth.”

Rents fell in 2023 across 40% of U.S. metro areas, primarily in the Sun Belt, Mountains or West Coast, that saw significant new supply entering the market. By comparison, nearly one-third of U.S. metro areas, mainly in the Midwest or Northeast, produced rent growth of 3% or more in 2023, and nearly all of them had little supply to work through.

“It’s all about supply,” Parsons said. “Apartment construction is at generational highs. It’s not a demand issue. Rents are falling in the markets with the strongest demand because those are the markets seeing multi-decade highs in new supply.” Those same markets will continue seeing elevated delivery levels in 2024, RealPage projected.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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