The Shifting Contours of New Supply
New supply will continue to be a major driver of multifamily performance this year. Over the past few years, the impact of deliveries has generally been as a headwind to rent growth thanks to downward pressure on occupancy. This year, the number of new units is expected to decline from its 2024 peak but will still be substantial relative to historic norms.
Sunbelt markets have been at the tip of the supply spear in recent years. The sheer volume of new units has obfuscated robust demand because that demand was not sufficient to offset new supply. Markets across the region stand to benefit in particular from the anticipated slowdown this year.
With this in mind, let’s have a look at upcoming versus recent deliveries for some of the most active markets. Numbers will include only conventional multifamily units. Keep in mind, these are estimates for this year’s supply. Delivery dates can move around quite a bit even after construction has started.
| Market | Expected New Units 2025 | New Units 2024 |
|---|---|---|
| New York City | 37,679 | 35,716 |
| Dallas - Fort Worth | 22,589 | 37,206 |
| Denver - CO Springs | 17,183 | 21,816 |
| Charlotte | 15,926 | 18,943 |
| Phoenix | 15,288 | 25,688 |
| Atlanta | 14,901 | 32,927 |
| Los Angeles - OC | 13,498 | 9,012 |
| Houston | 13,330 | 19,561 |
| Austin | 12,323 | 18,288 |
| Washington DC | 12,236 | 18,141 |
| Miami - Fort Lauderdale | 11,917 | 7,755 |
| Seattle | 10,846 | 12,478 |
| Tampa | 10,323 | 20,156 |
| San Francisco - Oakland | 10,254 | 8,601 |
| Nashville | 10,141 | 13,324 |
New supply is projected to decline year-over-year in eleven of the top fifteen markets for expected supply for 2025. Specifically, markets like Atlanta, Dallas – Fort Worth, Phoenix, and Tampa.
Possible Bifurcation in the Sunbelt
Unusually low average occupancy across the Sunbelt will not immediately snap back to their more typical ranges. Some areas like Atlanta, Austin, Dallas – Fort Worth, and Houston are expected to see new supply this year roughly in line with recent demand. For those markets, 2025 may not bring substantial occupancy improvement but rather a stop to the bleeding that began in late 2021. There is some opportunity to the upside should demand continue to improve since supply should recede back within normal net absorption range.
| Market | Expected New Units 2025 | Net Absorbed Units 2024 |
|---|---|---|
| Dallas - Fort Worth | 22,589 | 20,852 |
| Charlotte | 15,926 | 8,404 |
| Phoenix | 15,288 | 6,673 |
| Atlanta | 14,901 | 15,458 |
| Houston | 13,330 | 13,072 |
| Austin | 12,323 | 11,541 |
| Tampa | 10,323 | 5,685 |
| Nashville | 10,141 | 8,292 |
| Orlando | 9,590 | 10,963 |
| Raleigh - Durham | 9,066 | 8,964 |
For markets like Charlotte, Phoenix, Tampa, and Nashville the anticipated decrease in supply this year will keep deliveries at a level well above recent net absorption. A mitigation of the shortfall in absorbed units relative to new supply will be beneficial. Nevertheless, without robust improvement in apartment demand this year, markets fitting this profile could be on a slower recovery timeline compared to the previously mentioned Sunbelt markets.
Gateway Markets Could See Increased Deliveries
Among the most active markets for expected deliveries in 2025, there is a common through-line connecting those that could see a year-over-year increase in new supply. They are all Gateway markets.
Los Angeles – Orange County and Miami – Fort Lauderdale each have more than 4,000 new units estimated to be delivered this year above their 2024 total. Of course, the recent fires in the Los Angeles area could ultimately have some impact on that market’s annual total. If Boston is included as a Gateway market, it too fits into this paradigm with an increase in new supply of about 70% expected year-over-year.
| Market | Expected New Units 2025 | New Units 2024 |
|---|---|---|
| New York City | 37,679 | 35,716 |
| Los Angeles - OC | 13,498 | 9,012 |
| Washington DC | 12,236 | 18,141 |
| Miami | 11,917 | 7,755 |
| San Francisco - Oakland | 10,254 | 8,601 |
| Boston | 9,359 | 5,509 |
| Chicago | 3,377 | 8,441 |
Other Gateway markets like New York and San Francisco – Oakland could see an uptick in new supply this year but by a smaller margin. Given the size of Gateway markets, the scale of the potential year-over-year increase is marginal. Even so, this group of markets is the most uniformly set to see an increase in deliveries.
The exceptions among Gateway markets this year appear to be Chicago and Washington DC. Anticipated deliveries for Chicago are 60% lower than the 2024 total. Washington DC new supply this year is projected to be approximately 30% less than the new supply total last year.
Notable Changes to Other Regions
The Mountain West has been extremely active in recent years as well. The Sunbelt has dominated in aggregate new units because of the generally larger market size, but the Mountain West stood out when evaluating new supply as a percent of existing stock.
Denver – Colorado Springs is expected to see a notable slowdown in deliveries this year – by a margin of roughly 20% compared to 2024. Boise is another market that could see about a 20% decline in new deliveries from 2024 to 2025.
On the other hand, a projected 10% decrease for Salt Lake City puts it in a range where potential changes to construction times could be sufficient to make the annual difference insignificant.
| Market | Expected New Units 2025 | New Units 2024 |
|---|---|---|
| Denver - CO Springs | 17,183 | 21,816 |
| Columbus | 7,905 | 10,124 |
| Salt Lake City | 6,175 | 6,833 |
| Indianapolis | 4,405 | 6,078 |
| Cincinnati - Dayton | 3,811 | 2,991 |
| Boise | 3,502 | 4,237 |
| Madison | 3,146 | 2,841 |
| Kansas City | 3,140 | 4,561 |
| Minneapolis - St. Paul | 2,951 | 11,642 |
| St. Louis | 993 | 3,666 |
The Midwest has been a region that has benefited from a smaller proportion of new supply in recent years. That more muted new supply pressure has generally allowed market average occupancy to remain higher and has helped to fuel above-average rent growth.
Even from relatively lower starting points, many Midwest markets are expected to see a decline in deliveries this year. Columbus, Indianapolis, Kansas City, Minneapolis – St. Paul, and St Louis all appear to be set for a slowdown.
A couple of areas should see an increase in new supply this year. Cincinnati – Dayton leads the way in the region with about 25% more units expected to be delivered this year than last year. The other market is Madison, where new supply could rise by around 10% this year.
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