New-construction starts bottom out on a quarterly basis, completion times remain elevated
SANTA BARBARA, Calif., Nov. 7, 2024 – Despite a steep decrease in new multifamily construction activity, the under-construction pipeline remains elevated due to long development lead times. Yardi® Matrix’s Q4 2024 Multifamily Supply Forecast increased 8.1 percent for 2025 (508,089 units) and six percent for 2026 (371,509 units).
The annualized rate of new construction starts was approximated at 325,000 for 2024, which represents a 50 percent drop from the levels recorded in 2022 and 2023. Elevated completion times maintain a still-sizable under-construction pipeline. Consequently, completions in 2025 and 2026 will remain strong, anticipated to fall significantly in the second half of 2026 and 2027.
The under-construction pipeline from September 2023 to June 2024 was at or above 1.2 million units. While year-over-year the under-construction inventory dropped off the most in the Sun Belt, it increased in multiple markets in the Northeast and California.
The forecast does not anticipate new development to significantly rebound until 2026. Like last quarter, the Q4 update has new supply bottoming at 327,000 units in 2027, with a rebound taking place in 2028 and 2029 to around 2.25 percent of stock.
Review the Q4 2024 Multifamily Supply Forecast from Yardi Matrix.
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