Reaching a Peak

New Matrix Affordable Housing Report

By Joel Nelson on Feb 7, 2025 in Matrix

Affordable housing completions are set to peak this year, then fall in 2026, according to a new national report from Yardi Matrix.

The 78,377 units of affordable housing deliveries projected for this year would exceed by 12.6% the 69,596 registered in 2024. However, deliveries in 2026 could total no more than 64,745 units, according to the report. Factors driving the anticipated decline include the costs of land, labor and materials; rising insurance premiums; labor shortages; and delays in entitlements.

“As costs rise, the same amount of subsidies produces fewer units. And the longer it takes to build, the fewer units get delivered,” the report notes.

“The need for affordable housing has accelerated in recent years, and that is not likely to change as interest rates remain high and construction of for-sale housing lags historical levels. Despite that demand, the decline in starts signals fewer affordable multifamily deliveries in the years following 2025,” adds Paul Fiorilla, director of research for Yardi Matrix.

The report also notes that with market rate apartment starts registering their lowest number since 2013, affordable multifamily construction is increasing as a share of all multifamily development activity.

California, Texas and Florida lead the nation in affordable multifamily stock and development.

Yardi Matrix’s affordable database encompasses more than 25,000 fully affordable properties comprising more than 3.3 million units.

See the new national affordable housing report for more about key trends in the sector.