Dive Brief:
- In a month that has had no new federal construction starts data due to the ongoing government shutdown, Yardi Matrix has filled the gap with a report showing that the monthly reports from HUD and the U.S. Census Bureau may be more accurate than some observers think.
- In its fourth-quarter forecast update, Yardi Matrix said a “larger-than-expected under-construction pipeline” has led to upward forecast revisions for deliveries in 2025, 2026 and 2027.
- However, despite the upward revisions, at the end of Q3, the overall under-construction multifamily pipeline had still declined by 5.1% on a quarter-over-quarter basis to approximately 969,000 units. Current Yardi Matrix data shows new supply peaked in 2024 at 685,005 units, a 53.7% increase from 2021’s level.
Dive Insight:
Yardi Matrix’s 2025 forecast rose 6.8% to nearly 585,000 units, while new supply projections for 2026 were increased by 2.5% to almost 441,000 units.
Its 2027 forecast has jumped 12.8% from last quarter to nearly 407,000 units. With construction completion times averaging around 24 months, 2025 starts should open in 2027.
Yardi Matrix said it's increasingly likely that developers will break ground on 400,000 units this year.
“This year’s improved new-development activity relative to 2024 is the primary driver of this quarter’s increase in 2027’s forecast new supply,” Yardi Matrix said in the report.
Previously, Yardi Matrix had anticipated 2025 construction starts of 350,000 to 375,000 units.
“Both Matrix and Census Bureau data indicate that multifamily construction starts through the end of Q3 2025 are running above the pace recorded in 2024,” the firm said in the report.
Doug Ressler, manager of business intelligence at Yardi Matrix, told Multifamily Dive that pent-up housing demand and investor adaptation to new market realities are among the factors feeding the unexpected start numbers.
“Multifamily housing starts are continuing to rise into 2025 and 2026 despite the 10-year Treasury yield remaining above 4.0% due to a combination of strong demand fundamentals, supply constraints and policy support,” Ressler said.
Yardi Matrix’s supply forecast covers market-rate, partially affordable, senior and single-family rental multifamily property types. For 2025 through 2027, market-rate apartments should comprise around 77% of new supply, with affordable holding between 14% and 16%. SFR will be at about 7%.
The firm expects deliveries to hit 410,000 units in 2028, before increasing to over 450,000 units by 2030.
“Yardi Matrix continues to expect slower but still positive economic growth as well as a moderate reduction in short-term interest rates to support new-development activity in 2026 and beyond,” it said in the report.
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