Those in multifamily, who have watched new inventory levels spike, have seen surpluses follow that rebalanced supply and demand. The result — to the disappointment of developers and investors— is increases in vacancies and downward pressure on rent growth. The latter is in the low-to-mid-1% range, according to Moody's.
However, a new RealPage analysis suggests that some markets will likely see decreased inventories, restoring balance in those metro regions and possibly offering a better environment for multifamily professionals.
As GlobeSt.com has continued to report, expanded construction and unit deliveries have disrupted the multifamily industry. There's been a crying need since a major dip in housing deliveries during and after the Global Financial Crisis when the sector became radioactive for a time. Moody's has estimated the ongoing shortage at 1.9 million homes.
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Eventually buildings, particularly multifamily, sharply jumped in a chase after shifting demographics and business relocations, leading to historically high increases in apartment unit inventory levels during 2023 and 2024.
The result was increased vacancy rates and downward pressure on rents. As RealPage noted, at the end of the second quarter, the U.S. delivered 522,743 units with another 630,000 scheduled to complete over the next four quarters.
However, the building wasn't uniform. The construction largely followed the shifting business and demographic patterns. Now the lack of uniformity currently offers advantages in some metros. The big declines in completion volumes are largely in the South, where they represent 60% of the top 10, by RealPage's count. This makes sense because that's where the biggest delivery pressure has been and the largest impact on vacancies and rents.
Houston is at the top of the list, with a supply of 25,906 at the end of the second quarter in both 2024 and 2025. Plus, Q2 scheduled deliveries totaled 17,821, representing a 31.2% decrease. Minneapolis is next, going from 11,403 to 7,098, or -37.8%. Orlando is expected to go from 14,421 to 11,760, or -18.5%. Fort Worth is at 10,133 and might go to 7,964 for a drop of 21.4%. Next was Jacksonville, from 8,683 to 6,904, -20.5%.
The bottom five are San Francisco (2,485 to 1,194, -52.0%); Nashville (13,188 to 12,042, -8.7%); Chicago (7,530 to 6,596, -12.4%); Columbus (7,611 to 6,889, -9.5%); and St. Louis (2,925 to 2,244, -23.3%).
Reduced deliveries aren't the same as none, so deciding whether the competitive landscape in a market makes sense will require more examination.
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