In the face of persistent housing shortages and escalating barriers to buying homes, the U.S. multifamily sector is poised for another strong year. With high interest rates and affordability challenges pushing more people toward renting, developers are responding by delivering a substantial wave of new apartments. According to recent industry analyses, approximately 506,353 new rental units are anticipated to come online across the nation by the end of 2025. This marks a notable cooldown from the peak of around 640,000 units in 2024, yet it still outpaces the average annual additions seen since 2015, signaling sustained momentum in rental housing development.
The projected 506,353 units represent a strategic response to ongoing demand fueled by population shifts, remote work trends, and economic factors that make homeownership less attainable for many. Data from the U.S. Census Bureau's latest residential construction report shows that, year-to-date through July 2025, multifamily completions (for buildings with five or more units) have already reached 269.5 thousand units, with starts at 229.8 thousand and permits at 254.8 thousand. These figures align with broader forecasts, suggesting the full-year total could indeed hit or exceed the half-million mark as construction pipelines mature.
Industry experts attribute this activity to a mix of factors, including rising rental demand in growing urban centers. However, the pace has moderated due to tighter lending conditions and market saturation in some areas, leading to an overall decline from last year's highs. Despite this, the sector's resilience is evident, with adaptive reuse projects like converting offices into apartments expected to contribute a record 71,000 units in 2025, further bolstering supply.
One of the most striking aspects of this year's projections is the concentration of new development in the Southern United States. This region is set to account for 52.5% of all new apartments, totaling 265,613 units. Texas and Florida are the primary drivers, contributing nearly 30% of the national total with 81,407 and 62,184 units, respectively. The appeal of the Sunbelt lies in its business-friendly climate, lower regulatory barriers, and influx of residents seeking affordable living and job opportunities.
In contrast, the West follows with 25% of the supply (125,629 units), led by California and Arizona. The Midwest and Northeast trail behind, with 58,590 and 56,521 units, respectively, highlighting a clear geographic imbalance driven by varying economic and policy landscapes.
At the metropolitan level, New York City continues its reign as the top producer for the fourth consecutive year, with over 30,000 new units expected despite an 8.4% dip from 2024. Brooklyn alone is projected to deliver nearly a quarter of these, underscoring the borough's role in urban revitalization. Dallas-Fort Worth follows closely with 28,958 units, though it faces a steeper 22.4% decline.
Other standout metros include Austin (26,715 units), Houston (14,439 units), and Miami (15,666 units). However, not all areas are contracting; Riverside, California, anticipates a dramatic 154.1% surge in completions, while Naples, Florida, leads with a 275% increase, fueled by local demand and development incentives.
On a city-specific basis, Austin, Texas, tops the charts with 15,195 new units, benefiting from proactive rezoning policies that have expanded housing options and helped moderate rent growth. Charlotte, North Carolina (12,365 units), Houston (7,770 units), and Brooklyn (7,189 units) round out the leaders, with several Texas cities like San Antonio and Dallas also making strong showings.
| Rank | City | Projected New Units (2025) | Change from 2024 |
|---|---|---|---|
| 1 | Austin, TX | 15,195 | -5.3% |
| 2 | Charlotte, NC | 12,365 | N/A |
| 3 | Houston, TX | 7,770 | -37.6% |
| 4 | Brooklyn, NY | 7,189 | N/A |
| 5 | Phoenix, AZ | 6,409 | N/A |
While the overall forecast indicates a natural stabilization after years of rapid expansion, certain markets are bucking the trend with explosive growth. Areas like Birmingham, Alabama (198.1% increase), Lincoln, Nebraska (107.4%), and Sioux Falls, South Dakota (100%) are seeing surges due to affordability and targeted urban renewal efforts.
Conversely, some metros are experiencing sharp pullbacks. Chicago leads the declines with a 60.4% drop to just 3,756 units, followed by Madison, Wisconsin (-59.3%), and the Twin Cities (-56.5%). These reductions stem from elevated construction costs, stricter financing, and softening local economies. Broader outlooks from organizations like the National Association of Home Builders suggest multifamily starts will continue declining in early 2025 before stabilizing later in the year.
As Doug Ressler, Senior Analyst at Yardi Matrix, explains, Southern markets thrive thanks to efficient permitting processes and economic incentives that facilitate quicker project timelines, ultimately benefiting renters with more options and competitive pricing.
This influx of new apartments could provide much-needed relief in high-demand areas, potentially easing rent pressures and improving housing accessibility. For instance, Austin's supply boom has already contributed to rent declines, a pattern that may spread to other hotspots. However, challenges like interest rate fluctuations and material costs could influence final delivery numbers.
Looking ahead, forecasts from Yardi Matrix indicate a slight uptick in completions for 2025-2027 compared to earlier predictions, with over 1 million units currently under construction nationwide. This positions the multifamily market as a key player in addressing America's housing needs, though balanced growth will be essential to avoid oversupply in vulnerable regions.
This article is based on data from reputable sources including RentCafe, Yardi Matrix, and the U.S. Census Bureau, compiled as of August 2025. Projections are estimates and may evolve with market conditions.
At GOAT Realty, we believe that home buying is more than just a deal. It is a journey to find the best space that fits your unique lifestyle.
