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By Giulia Carbonaro
Senior Reporter
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New apartment construction in the U.S. is on track to hit a 50-year record high, economists report, with apartment completions likely to approach 600,000 units by the start of 2025.
"It's only the midpoint of 2024, and yet apartment developers have built more units so far this year than they did in any year between 2001-2013, with 284k units completed," Texas-based rental housing economist Jay Parsons wrote on the social media platform X, formerly known as Twitter, on Tuesday.
"By the end of 2024, apartment completions could approach 600k units for the first time since 1974," he added. Newsweek contacted Parsons for comment by direct messaging on LinkedIn.
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According to Parsons, "many of us may never see numbers like this again in our lifetimes (barring massive changes in policy etc.)"
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Already in 2023, the country built more new apartments than it had in the previous 36 years, as reported by RealPage, with 440,000 apartment units completed throughout the year. Between 2000 and 2022, the annual average had remained below 250,000 apartment units completed.
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The recent increase in supply has allowed the growth in apartment rent prices to finally slow down after the booming years of the pandemic, despite demand remaining high. Demand is still massive across the U.S. after years of underbuilding, especially considering that the country now has a much larger population of renters than it had in the 1970s, when it was building a similar number of new apartments.
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This has kept rent prices from falling significantly when new inventory started flooding in. According to Redfin, the median U.S. asking rent rose 0.8 percent in May, compared to a year earlier, to $1,656. This was the highest level since October 2022.
This is likely why renters aren't exactly rejoicing at the idea of more new homes finally being built. Many still struggle to afford rent: a 2024 study by Harvard's Joint Center for Housing Studies found that roughly half of 22.4 million renters who are rent-burdened are spending more than 50 percent of their income toward rent.
A previous study published by the university's Joint Center for Housing Studies last year found that most of the new apartments built last year were unaffordable for people with the lowest income. Despite the record number of new apartments built across the country, the experts wrote that the supply of low-rent units was falling, and most of the new construction was adding "primarily" to the high-end rental stock.
"Even as the abundance of mostly high-end apartment units under construction reaches the market, it remains unclear how much relief this will provide for households with low and moderate incomes," the report read.
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