Top Markets for Multifamily Deliveries
Over the past 12 months, more than 306,000 multifamily units have been delivered throughout the U.S. as rental housing development continues to be strong. Since 2015, over 300,000 units of net new supply have been added annually and 2019 is projected to end up with a similar figure, as is 2020. The national vacancy rate declined to 5.6% at the end of August 2019, as a healthy job market, costly homeownership, and strong renter household formation continues to fuel positive absorption. Average asking rents increased 3.1% year-over-year as a result.
The top three markets for sheer number of units completed—Dallas-Fort Worth, New York, and Washington, D.C.—accounted for 18% of total deliveries in the U.S. over the past 12 months, while the top 20 markets contributed nearly 60% of new stock delivered. Approximately 670,000 units are currently under construction in the U.S., representing about 4.0% of total multifamily stock. New York (57,700 units), Dallas-Fort Worth (35,500 units), and Washington, D.C. (29,200 units) continue to lead in terms of nominal units underway.
When looking at the numbers by the percentage of existing stock that new deliveries account for, Charlotte and Miami lead with deliveries comprising 4.5% of their existing stock. Even with an elevated ratio of new deliveries to existing stock, Charlotte’s vacancy rate remains at or near historical levels as demand remains robust due to its strong population and job growth. In contrast, New York and Los Angeles (the two largest multifamily markets in the nation) had deliveries that only accounted for 1.4% and 1.0%, respectively, of existing stock.