U.S. apartment construction is expected to hit a historic high of more than 500,000 new units this year, a new study from RentCafe found, and Phoenix is helping lead the surge.
The influx represents a 9% increase compared to last year and a 30% jump from 2022.
The Phoenix Valley ranked No. 4 among major metro areas nationwide, with more than 20,000 apartments expected to be completed in 2024.
“Phoenix is now actively combating climate change and water scarcity in an effort to become ‘the world’s most sustainable desert city,’” the study said. “This shift toward sustainability could be one of the reasons why the city has been attracting more and more environmentally conscious businesses and residents in recent years, thus driving demand for apartments for rent in Phoenix.”
The study projects that nationwide, more than 2 million new apartments will hit the market by 2028. The rate of apartment building, though, is expected to dip from 2025 through 2027.
“Even with apartment construction conquering a new peak in 2024, higher borrowing costs are affecting the multifamily sector, prompting many developers to adjust their strategies for the coming years,” the study said. “This means they might focus on lower-risk projects or shift toward markets with strong demand and job growth.”
The top 10 cities for new apartment construction this year are:
- New York City, 32,935 units
- Dallas, 32,932 units
- Austin, 21,506 units
- Phoenix, 20,141 units
- Atlanta, 18,920 units
- Houston, 18,301 units
- Washington, D.C., 15,079 units
- Charlotte, 14,658 units
- Miami, 14,177 units
- Denver, 12,913 units