New apartment construction may reach a record high this year, particularly in the states of the Sunbelt, according to a new report from the firm Yardi Matrix.
That report, Multifamily Rent Forecast Update, is also predicting a rather subdued growth in the price of rents for the next two years, ranging from 1.1% to 1.5%, before “picking back up to a healthier, more usual 3-4% growth.”
The pace of apartment construction this year will be second only to what happened last year, which the reports notes “saw the most units delivered in a single year” since 2008, a 12-month period otherwise known as the year of the Great Financial Crisis.
While both apartment construction and rent trends appear predictable for the time being, notes the report, Trump administration policies have “inserted a degree of volatility” which the Yardi Matrix research says is currently “difficult to encapsulate in any of our forecasts.”
As matters currently stand, the White House is “seeking to redirect the mix of fiscal policies toward a different level and kind of government involvement in the economy and a reduced governmental size and regulatory burden to engender a disinflationary supply response.”
The signals coming out of Washington, as well as policies at the state level may significantly impact both inflation and the job rate. For apartment builders and owners, this could create challenges when it comes to lower income residents who may contribute to an increase in credit card and auto loan delinquencies.
For the present, concludes the Yardi Matrix report, “it is unclear how the mix of policies will play themselves out, but the timing will have a meaningful impact on the direction of the U.S. economy.”
Based in Scottsdale, Yardi Matrix explores real estate trends in multifamily, affordable housing, student housing, industrial, and office segments.
March 31, 2025
By Garry Boulard
Photo courtesy of Unsplash
