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Permits to Build U.S. Apartments Drop Below Pre-Pandemic Levels

Women in Real Estate
Written by Posted On Sunday, 04 May 2025 07:16
Permits to Build U.S. Apartments Drop Below Pre-Pandemic Levels

Redfin reports permits to build multifamily housing units are down 27% from the pandemic building boom and down 5.5% from before the pandemic

Developers obtained permits to build 12.4 multifamily housing units for every 10,000 people in the U.S. over the past year, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. That’s down 27.1% from 17 units per 10,000 people during the pandemic building boom, and down 5.5% from 13.1 units in the years leading up to the pandemic.

This is according to a Redfin analysis of U.S. Census Bureau data covering building permits for multifamily units in buildings with five or more units.

Remote work during the pandemic allowed scores of Americans to relocate, leading to a surge in rental demand. Builders ramped up construction in response—particularly in high-demand Sun Belt metros like Austin, TX and Tampa, FL. That led to a record number of new apartments being completed in 2024. But now, rents are flattening and borrowing costs are high, making building less attractive.

“New apartments are being rented out at the slowest speed on record, and builders are pumping the brakes because elevated interest rates are making many projects prohibitively expensive,” said Redfin Senior Economist Sheharyar Bokhari. “At some point in the next year, the slowdown in building will mean that renters have fewer options—potentially leading to an increase in rents.”

Austin is still permitting more multifamily housing than any other major metro

In spite of falling rents, developers are still targeting Austin for growth. The Texas metro granted permits to build 64.5 multifamily units for every 10,000 people over the past year. That’s the highest level among the 78 U.S. metros Redfin analyzed with populations of at least 750,000. The top five was rounded out by four more Sun Belt metros: Cape Coral, FL (59.6), North Port, FL (53.3), Raleigh, NC (41.1) and Orlando, FL (40.7).

At the other end of the spectrum, Stockton, CA recorded 0 new permits in the past year—the lowest of the metros analyzed. Next came Bakersfield, CA (0.8 units per 10,000 people), El Paso, TX (1.6), Providence, RI (1.6) and Baton Rouge, LA (1.9).

63% of major metros have posted a decline in multifamily permits since the pandemic

Nearly two thirds (63%) of the metros analyzed posted a decline in multifamily construction since the pandemic era. Stockton saw the biggest drop, with permits per 10,000 people falling to 0 from 5.7—a decline of 100%. Next came Colorado Springs, CO (-82% to 8.6 units per 10,000 people over the past year from 47.7 during the pandemic), Boise City, ID (-64% to 12.6 from 35.2), Minneapolis (-62% to 13.6 from 35.6) and Jacksonville, FL (-61% to 15.9 from 40.9).

Oklahoma City led the list of metros posting the biggest increase, growing 193% from 1.7 units permitted per 10,000 people during the pandemic to 5.1 over the past year. That’s still well below the national average of 12.4 units permitted per 10,000 people, something the next four cities also have in common. Pittsburgh (+184% to 8.8 units per 10,000 people in over the past year, from 3.1 during the pandemic), Hartford, CT (+102% to 9.4 from 4.6), Baton Rouge, LA (+90% to 1.9 from 1.0) and Milwaukee (+88% to 11.8 from 6.3) round out the top five metros posting the highest permit growth.

To view the full report, including a metro-level summary, charts and methodology, please visit: https://www.redfin.com/news/multifamily-construction-permits-2025

 

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