2021 looks like another banner year for apartment construction across the United States despite challenges posed by the COVID-19 pandemic and a labor shortage in the construction industry.
The apartment listing service RENTCafe reports that 334,000 units are projected to be opened in the U.S. by the end of this year, which keeps 2021 in line with the past four years. Eight different major metro areas are expected to see five-year highs in apartment construction.
What’s fueling the strong numbers? A key factor is likely a trickle-over effect from the hot housing market. As Plus VP of Consulting Chris Pardo recently wrote about, many people are understandably getting priced out of buying, so they turn their attention to renting instead. Chris adds that many relocating employees have said recently that they plan to rent for a while first in their new location before (possibly) buying a home later.
Doug Ressler, manager of business intelligence at Yardi Matrix, which owns RENTCafe, made a similar point:
“Lack of entry-level housing supply and rising home prices will show the multifamily rental market demand increasing as new renters enter the market and Millennials extend their rental commitments.”
This all means that it will continue to be important for mobility programs to provide adequate home finding and rental assistance. As Chris also noted in his recent piece, with many people flocking toward apartments due to high home prices, we may be on the verge of “pandemic rental wars” that put plenty of stress on anyone looking for a new place to call home.
More precisely, 334,000 units are projected to be opened in the U.S. by the end of this year, according to Yardi Matrix estimates. These figures reflect the striking difference between the aftermath of the pandemic crisis and that of the housing crisis of 2008. In 2021, there were nearly three times more apartments under construction than there were in 2011.