Excess supply in multifamily has become a major issue in the industry since 2023 and the most important driving factor in rent levels and growth.

There has been explosive growth in housing units, particularly multifamily. In June 2024, private-owned housing completions had increased sequentially by 10.4% to a seasonally adjusted annual rate of 1.71 million units. That includes both single-family and five-or-more-unit multi-family. The latter represented the bulk of the construction at 656,000 units. That was an increase of 26.2% month-over-month or 40.2% year-over-year. That's the highest seasonally adjusted rate since September 1974.

However, this sort of description is of an average phenomenon. The figures don't apply evenly to every building in every residential area. To better understand markets for investing, development, and ownership, it's necessary to know which areas are most exposed to excessive increases in rental unit inventory.