Another year is in the books, and before jumping fully into 2025, now is a good time to fully digest 2024 multifamily performance. To that end, we will be looking at 2024 performance across the metrics of new supply, apartment demand, average occupancy and average effective rent over the next few weeks. First up is new supply.
All numbers will refer to conventional properties of at least fifty units. Additional market-specific information is available here.
National New Deliveries
An astounding number of new multifamily units were delivered across the United States in 2024. Just a hair under 600,000 new units was the highest ever annual total. Deliveries last year far surpassed the 2023 total of about 462,000 units – which had itself been a huge total.
One interesting aspect of recent years was the increase in the share of new units coming into the market outside the top two price classes. Because ALN assigns a price class based solely on a property’s unit mix-weighted average effective rent per square foot, changes in the make-up of new supply can be measured.
The surge in new supply in recent years drove the aggregate number of new units up across the four price classes. However, when evaluating new deliveries by price class as a share of total deliveries, there were interesting changes as the development cycle aged.
In 2021, nearly 70% of new units nationally entered the market as Class A or Class B. These two tiers account for roughly the top one-third of properties according to average effective rent. In 2022 and 2023, only about 62% of new units entered their market in the top two price tiers. In 2024, the share of new units delivered in the top two price classes rose to about 65%. The distribution of new units across the price classes in 2025 and 2026 may look more like 2024 than 2022 or 2023.
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New Deliveries at the Market Level
Like deliveries by price class, record new supply was enough to increase aggregate deliveries across markets of varied sizes. Primary, secondary, and tertiary markets all saw a year-over-year increase in new units delivered. Only micro markets took a step back. These markets taken as a group had less than 10,000 new units introduced in 2024. Despite the total being lower than in 2023, 2024 was still the second-most of the last five years.
Notably, the share of new units delivered in primary and secondary markets declined last year. The difference was the tertiary markets where 14% of total new supply last year was located. This matched the value from 2022 and otherwise represented the high-water mark for recent years.
Many of the usual suspects ended the year atop the new supply rankings. Dallas – Fort Worth led the way with more than 37,000 new units. New York and Atlanta followed with around 36,000 and 33,000 new units, respectively. The Sunbelt continued to dominate. Eleven of the top fifteen markets for new supply were Sunbelt markets. A little more than 22,000 new units in the Denver – Colorado Springs market made it the only market in the top fifteen that was not either a Sunbelt or Gateway market.
On a market size-adjusted basis, Sunbelt markets were even more prevalent among the most active. Five markets across the country added 10% or more of existing stock in 2024 alone. Of those five, only Boise was not in the Sunbelt. Myrtle Beach (17%), Fort Myers – Naples (13%), and Pensacola (11%) were the national leaders.
Among larger markets, Charlotte, Tampa, and Nashville featured the most size-adjusted new supply. Each added at least 7% of existing stock in 2024.
Takeaways
Multifamily new supply in 2024 was historic. Approximately 600,000 new units was a truly massive number. As recently as 2022, about 415,000 new units was considered an extremely active year. 2024 is expected to be the peak in deliveries for this cycle, but the 2025 annual total will probably not be dramatically lower. New supply pressure will continue to play a prominent role in industry performance this year for many parts of the country.
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