A jump in apartment construction in the US may help provide some relief to renters who’ve faced soaring prices — eventually.
This year, 420,000 apartments are expected to be delivered nationwide, according to a study by listing service RentCafe. It would be the second year in a row that the industry tops 400,000 units, a mark that was last reached in 1972.
Three-year average for new US apartments expected to surpass 400,000
The construction boom was driven by demand, particularly in Southern cities such as Dallas and Miami where many Americans flocked during the pandemic. Other places that were deserted during the worst of the Covid-19 crisis, including New York City, have seen an influx of returns.
Soaring home prices nationwide also has prevented many from purchasing a house, adding pressure to the rental market.
Half of the top 20 metropolitan areas ranked by construction are set to reach five-year highs in apartment deliveries this year. Houston had the most units delivered in the first half, followed by Austin, Texas, and Seattle.
Overall, five cities account for almost a quarter of all new apartments expected this year, according to RentCafe.
Top 5 Markets
Almost 100,000 apartments are expected to be built in the top five markets
In New York, deliveries are set to surge by more than 28,000.
The extra supply may provide some relief for renters in a city where prices have skyrocketed lately. However, the impact on prices won’t be felt immediately.
The US housing market has for years suffered from lack of inventory, and the pandemic made it worse with labor shortages and supply-chain disruptions. By and large apartment developers were able to pick up the pace in the past 18 months or so, the RentCafe analysis shows.
“The construction industry is finally returning to pre-pandemic levels of activity but is still being hampered by three familiar challenges: labor shortages; material costs and availability; and supply chain issues,” Doug Ressler, manager of business intelligence at research firm Yardi Matrix, said in the RentCafe report.