The United States is expected to add a record number of new apartments this year, with a total of 518,108 rental units projected to be completed by 2025. This marks a 9 percent increase over 2023 and a 30 percent increase over two years ago. Texas is leading the way in construction, with four of its cities ranking in the top 20 U.S. metropolitan areas for new apartments built this year, including two of the top three. Texas cities such as Dallas and Austin are expected to build roughly 10 percent of all apartments completed nationwide by the end of December.
Demand for new apartments in Texas remains robust due to factors such as corporate migration and high home prices. Dallas and Austin have been attracting a flow of workers moving in from out of state, with Dallas experiencing consistent population growth and adding more than 150,000 new residents between July 2022 and July 2023. The metro’s business-friendly environment, affordability, and good infrastructure have continued to attract companies and construction projects. Austin, despite its recent boom-and-bust, remains the second fastest-growing metro in the country, fueled by a strong job market and opportunities in tech, healthcare, and hospitality.
The U.S. housing market is facing a historic shortage of homes due to chronic underbuilding in the years following the 2007-2008 financial crisis. The lack of supply contributed to rising housing prices during the pandemic, despite high demand and low mortgage rates. Although housing inventory has increased in states such as Florida and Texas, the national market remains significantly undersupplied compared to existing demand. Data from Redfin shows that the total number of homes for sale in July was 1,635,395, down 0.6 percent from June but up 13.7 percent from a year earlier, indicating a persistent shortage of available homes.
Despite the housing shortage, the top 20 U.S. metros are expected to complete a significant number of new apartments by the end of the year. Cities such as New York, Dallas, Austin, Phoenix, Atlanta, and Houston are projected to have the highest number of new apartment completions. The construction of new apartments is driven by various factors such as population growth, corporate relocations, and job opportunities, which continue to attract residents to these metropolitan areas. The increasing supply of apartments in these markets may help alleviate some of the pressure on housing affordability.
The increase in new apartment construction reflects the growing demand for rental housing in the United States, particularly in states like Texas where affordability remains a concern for residents. With rising home prices and limited housing inventory, rental apartments provide a more accessible option for many individuals and families. The construction of new apartments not only addresses the shortage of housing but also supports economic growth by creating jobs and boosting local economies. By focusing on increasing housing supply, policymakers and developers can help address the ongoing challenges in the housing market and provide more options for individuals seeking affordable and quality housing.
In conclusion, the record number of new apartments being built in the United States reflects the ongoing demand for housing and the efforts to address the housing shortage in various metropolitan areas. Texas, in particular, is leading the way in apartment construction due to factors such as population growth, corporate relocations, and job opportunities. While the national housing market remains undersupplied compared to demand, the completion of new apartments in key metro areas may help alleviate some of the pressure on housing affordability and provide more options for residents. Moving forward, continued efforts to increase housing supply and address affordability challenges will be crucial to ensuring access to quality and affordable housing for all Americans.
