Rental Housing Economist (Apartments, SFR), Speaker and Author
This isn't getting enough attention outside of multifamily industry circles: Apartment starts are plummeting to 11-year lows. Multifamily completions are outpacing starts by the widest margin (-120k units) since 1975. I mention this because we keep hearing/reading how "housing construction is at all-time highs," but that's a dated like with a 2022 expiration date. We're seeing the fruit's of 2022's all-time high in construction activity here in 2024, where starts are morphing into completions. But housing construction (overall) is down 10% from the peak, and multifamily is down even more. In 2024 through July, we've completed 314k multifamily units and we've started just 193k units, according to Census data. That year-to-date start total is the nation's lowest since 2013. As I've noted here before, I think we're reverting back to early 2010s supply levels -- not late 2010s (pre-COVID) supply levels, and there's a big difference between the two eras. Additionally, a larger share of supply in this next cycle is likely to be income-restricted affordable housing because tax incentives are helping offset sticky costs + higher rates and flat/falling rents. This is why we're seeing so much renewed bullishness on the multifamily outlook for 2026 and beyond -- particularly for higher-demand markets getting pelted by lease-ups today. This data is central to the thesis among the big portfolio buyers we've seen in the news. Supply is the biggest headwind for apartment investors today, while it's an enormous tailwind for renters ... but those dynamics appear likely to shift again. It took a perfect storm of variables to push apartment construction to 50-year highs, and it's difficult to see a scenario where construction could re-accelerate back to those peaks. Some might point to the Harris campaign's housing supply plans, and those are very positive. But they focus almost entirely on low-income affordable housing and on for-sale starter homes. Barring a massive pivot that would dramatically reduce construction costs and introduce big new incentives, the plan would likely have minimal impact on conventional apartments. As I've written before (and I could be wrong), but my guess is today's completion levels will mark a generational high akin to the mid-1970s. Some of us may never see numbers like this again in our careers. #multifamily #housing #apartments
