U.S. apartment construction reaches record numbers

New York City metro leads all new construction while Dallas and Austin follow closely behind.

Two million apartments are predicted to come online by 2028. (Credit: Jonathan Stutz/Adobe Stock)

U.S. developers are building apartments at a record level in 2024, according to an August report from RentCafe.

Construction crews are on pace to finish 518,108 rental units by the end of the year, marking a 9% increase from 2023 and a 30% jump from 2022. The 2024 projections mark the first time completions surpassed the half-million plateau.

The data showed New York City metro led new apartment construction for the third consecutive year, followed by Dallas and Austin. Construction is also predicted to spike in Phoenix, Raleigh, Charlotte and Nashville.

RentCafe said two million apartments would come online by 2028.

At the same time, Houston is predicted to add 28,000 fewer new apartments in the coming years, with Minneapolis-St. Paul, Dallas, Atlanta and Seattle also slowing down on new projects, according to RentCafe.

“The overall impact on the number of developers might vary by region,” Senior Analyst & Manager of Business Intelligence at Yardi Matrix, Doug Ressler, said in the RentCafe report.

“In places like Texas, for instance, the demand for apartments remains robust due to factors like corporate migration and high home prices,” he added. “On the other hand, some markets are seeing a slowdown in new construction starts due to the economic environment.”

Despite 2024s projection totals, RentCafe said developers expect to deliver just 440,478 new units in 2025, notching a 15% drop in deliveries.

“Construction is projected to slow even more through 2027 when deliveries are expected to reach a 10-year low with 319,000 rentals opened nationwide,” RentCafe said.

Meanwhile, high mortgage rates and fewer buying options have made owning a home almost 37% more expensive than renting.

The average monthly mortgage payment for a median-priced home sits at $2,703, while the average monthly rent payment is just $1,979, representing a 36.6% difference between the two price points.

While prices fluctuate between locations, renters insurance costs an average of $148 annually, or about $12 each month, and doesn’t cover structural damage, with rates largely based on risk proximity to natural disasters like severe storms, hurricanes, and flooding.

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