Multifamily development has continued to decline during the third quarter, with new construction starting bottoming out at an annualized rate of 325,000 units, according to Yardi Matrix's third-quarter multifamily forecast. However overall activity is declining at a slower rate than previously expected.

Construction starts are down 50% from 2022 and early 2023, but because completion timelines are elevated, the construction pipeline is still sizable, said Yardi Matrix. Multifamily completions are expected to remain elevated next year and into early 2026 before they begin to cool off during the second half of 2026. As such, Yardi Matrix increased its Q4 2025 forecast by 8.1% to 508,089 units and its 2026 forecast by 6% to 371,509 units.

From September 2023 to June 2024, the under-construction pipeline was at or above 1.2 million units, with 567,997 of those in lease-up, according to the report. That represents a 9.7% decline in lease-up units quarter-over-quarter but a 5.5% increase year-over-year. Units under construction but not in lease-up increased 2.7% quarter-over-quarter to 595,945. This category peaked at nearly 700,000 in November 2023.