Sandy

Look out below! Multifamily completions outpace new starts by 169k so far in 2024 -- the widest gap in recorded history. No matter who wins the White House, U.S. multifamily housing supply will almost certainly drop off in 2026-28 compared to 2023-25.

Great research by @Harvard_JCHS showing that neighborhoods with more rental housing are more diverse.

The U.S. is adding more new apartments in the first half of 2024 than we did in most FULL CALENDAR YEARS over the last 3 decades, and yet demand is (almost) keeping pace. That is crazy-- and don't give a stalled-out for-sale housing market all the credit. Would-be buyers are mostly already renters, and most are in or will go to SFR as life stages evolve, so these are mostly net new renters (typically 20-somethings) entering the apartment market. The chart below (which isn't exact apples-for-apples math but is directionally useful) shows how supply is surging and yet occupancy rates are holding steady so far in 2024-- which means massive demand coming into the market. One trend that doesn't get much conversation outside of industry circles is that operators today are laser focused on occupancy and retention (which was reflected in recent REIT calls too). So part of the story here is giving on rents to get on occupancy. Nationally, new lease apartment rents were flat for the 11th straight month, while renewal growth has normalized well below previous peaks. So the story here is still that supply is doing its thing-- putting downward pressure on rents, and that's in turn helping boost demand and fill all these new units. But remember that new apartment starts have plunged, so this supply wave will be petering out by 2H'2025 and into 2026.