Apartment Markets Scheduled to See Deliveries Decrease in the Coming Year

New apartment supply has been hitting the U.S. apartment market heavily in the past few years, with some markets scrambling to keep up with the influx. But a handful of major apartment markets are scheduled to see completions taper off in the coming year.

The U.S. overall delivered 522,743 units in the year-ending 2nd quarter 2024, according to data from RealPage Market Analytics. At the end of 2nd quarter, there were another almost 630,000 units underway and scheduled to complete in the next four quarters. But while the U.S. overall is expected to see delivery volumes increase in the coming year, a handful of major markets will see their supply totals go a different way.

The list of markets expected to see the most notable declines in new completion volumes in the coming year is heavy in the South markets, which have been prime contributors of delivery volumes recently.

There are also several markets in the Midwest which haven’t seen nearly as much new supply as some other areas across the U.S. in the most recent building cycle.

Houston is expected to see the nation’s steepest decline in apartment deliveries in the near term. Over 25,900 units were delivered here in the past year, ranking the market behind only Dallas for new supply on a national scale. Additionally, this was the biggest volume of completions in a single year in Houston since the 1980s. While supply will continue to be significant, the 17,821 units scheduled to complete in the year-ending 2nd quarter 2025 would be more than 8,000 units fewer than completed in the year-ending 2nd quarter 2024. That represents a 31.2% decline.

Minneapolis is the Midwest market scheduled to see the most reduction in new completions in the near term. A little more than 11,000 units were delivered here in the past year, nearly double the volume seen in any other Midwest apartment market. In the coming year, however, Minneapolis is slated to deliver just over 7,000 units, or 37.8% fewer units than the current annual volume. Still, that will remain the Midwest’s largest completion tally.

Among the nation’s largest apartment markets, San Francisco is scheduled to see the deepest reduction in relative supply completions in the coming year. Only 2,485 units were delivered in this chronically undersupplied market in the past year, and only about half that level is expected to complete in the coming year.

Nashville is another South region market with scheduled completions falling off. In the year-ending 2nd quarter 2024, deliveries hit an all-time high in Nashville, at almost 13,200 units. While supply volumes are scheduled to remain high, the 12,000 or so units slated for completion in the coming year represents a roughly 9% decline in deliveries.