US apartment construction is at a 50-year high, with NYC taking the lead

New rental units are coming to the US housing market. This year, multifamily construction reached a 50-year high, providing much-needed relief for renters across the country. Approximately 420,000 new rental units will be delivered nationwide by the end of this year, according to the study published by RentCafe. 

For the first time since 2018, New York City has reclaimed its status as a leader in apartment deliveries. More than 28,000 new rental units are coming to the city before the end of 2022. This is a new all-time high and a 50 percent increase from last year. The long-awaited jump is a great development for NYC renters who face low affordability and strong competition. In July, the average rent in Manhattan broke another record and reached $5,113 a month. 

The boost in construction levels comes from the demand for new apartments across the country, specifically in Southern cities, including Dallas, Texas, and Miami. Since the start of the pandemic, many Americans have relocated to these cities, and the demand for rentals has skyrocketed. 

Another RentCafe report found that the Miami metro is the most competitive rental market in the country, with 97.6 apartments occupied. Fortunately, Miami saw one of the fastest increases in multifamily construction. This metro had a remarkable comeback and climbed six positions from 2021 to third place among the areas with the highest number of new apartment deliveries. Previous leader, Dallas, TX, ranks second, while Austin and Houston take fourth and fifth place respectively.

Although a growing number of new rentals are coming to the US housing market, the construction industry still suffers from the effects of the pandemic. Pressing economic concerns, such as high inflation and supply chain disruptions, present a challenge for developers. 

“The construction industry is finally returning to pre-pandemic levels of activity but is still being hampered by three familiar challenges: labor shortages; material costs and availability; and supply chain issues,” manager of business intelligence at Yardi Matrix, Doug Ressler said in a statement. 

Resources:

“The Best of Times for Apartment Construction in Half a Century: New York Takes the Lead in 2022,” by Veronica Grecu (RentCafe, 2022)

“The Most Competitive Rental Markets in 2022: Miami Is Red Hot, While Competition in the Northeast Intensifies,” by Veronica Grecu (RentCafe, 2022)

“NYC leads US apartment deliveries, which are forecast to hit 50-year high,” by Holden Walter-Warner (The Real Deal, 2022)

“New Apartments at 50-Year High May Ease Pressure on US Rents,” by Alexandre Tanzi (Bloomberg, 2022)