Multifamily construction dwindles, but completions should increase in 2024
SANTA BARBARA, Calif., Feb. 12, 2024 – Yardi® Matrix’s Q1 2024 Multifamily Forecast Supply update suggests the Q4 2023 report remains on target. New construction moderated, the under-construction pipeline is robust, and elevated deliveries are anticipated for 2024 and 2025.
The multifamily markets tracked by Yardi Matrix had just under 1.25 million units underway in Q1 2024, 483,207 of which are currently in lease-up and expected to come online in 2024. The figure is just below the six-month average of 518,075 units and 8.7 percent behind the last quarter.
Meanwhile, the remaining 766,353 units will be completed in late 2024, or 2025 and early 2026. This figure represents a 9.9 percent quarter-over-quarter increase and a 36.6 percent year-over-year increase.
“The large under-construction pipeline will deliver a record level of new supply in 2024, and a relatively large amount of new supply will come online in 2025, as well,” say Matrix analysts.
An increase in the number of days in construction for garden and mid-rise properties contributed to the robust under-construction pipeline. Meanwhile, high-rise project completion times have returned to pre-pandemic levels.
Construction starts are slowing down but last year volume exceeded expectations. In 2023, 518,869 units started construction, trailing 2021 and 2022.
A weaker economy, tight financial conditions and record supply levels will contribute to the slowdown in construction activity in 2024. This reduction is expected to produce an approximately 30 percent decline peak-to-trough in new supply.
Review the Q1 2024 Multifamily Forecast Supply from Yardi Matrix.
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