Easing Apartment Supply in Minneapolis Should Boost Occupancy

Apartment construction activity is on the decline in the Minneapolis-St. Paul-Bloomington apartment market, which should allow for apartment occupancy to recover in the near term. Annual supply levels have been trending down in Minneapolis since reaching a peak of 11,804 units in early 2024, a 3.2% inventory boost, according to data from RealPage Market Analytics. Most recently, a much smaller volume of 7,438 units came online in the market during the year-ending 1st quarter 2025, growing the existing unit base 2.2%. That represented a year-over-year decline in deliveries of 37%, the second-deepest drop among the nation’s 50 largest markets, besting only St. Louis (-49.6%). New supply in the Twin Cities is expected to continue its downward trend in the near term. In 2026, the market is expecting the delivery of 2,540 units, expanding inventory just 0.7%. That would be one of the lowest growth paces among the nation’s 50 largest apartment markets. Heavy supply volumes over much of the past two years have kept occupancy in Minneapolis below historical norms. From 2015 to 2019, occupancy averaged 96.9%, while the 1st quarter 2025 rate registered at 95%. With supply trending down, occupancy should return closer to historical norms in the near term.