The risk of oversupply in the multifamily sector across the country may be subsiding as demand increases and the pace of construction slows. This could signal recovery in the market broadly, although the situation varies from market to market, according to a multifamily market analysis by Cushman & Wakefield.

More than a million units were under construction last year, the most ever in the United States. This wave of new construction while occupancy was retreating triggered the risk of oversupply in several markets. However, the multifamily market has experienced some of the strongest demand for apartments on record over the past year at a time when the pace of construction is now slowing.

Cushman & Wakefield noted the multifamily pipeline is shrinking in nearly all markets and noted significant declines in some of the hottest post-pandemic development epicenters, such as Austin and Nashville. Austin's construction fell from nearly 19% of its inventory last year to 11% today, while Nashville's fell from 15% to under 9%.