A wave of apartments is coming, and we’re already seeing its effect: Falling rents, or minimal rent growth. It’s the talk of the town, but it isn’t the whole story. Permits for apartments, obtained by builders to construct homes, have plummeted close to 30% since the pandemic and are fewer than last year, too, according to a Redfin analysis of data from the U.S. Census Bureau.
Redfin listed two reasons why this is. First, interest rates are higher, which means borrowing costs to build homes aren’t cheap. Second: “There’s already a near-record number of new multifamily units hitting the market due to a building boom in recent years, making it difficult for some property owners to find tenants,” according to the analysis. “Less than half (47%) of new apartments that were completed at the end of last year were rented within three months—the lowest share since 2020.”
