Read more Stateline coverage of how communities across the country are trying to create more affordable housing.
An unprecedented surge in the nationwide construction of new housing — mostly apartments — may finally be making a dent in fast-rising rents that have been making life harder for tenants.
More than 1.65 million housing units were under construction last year, the highest annual number since federal record-keeping started in 1969. This year, the number was even higher — almost 1.7 million in September.
Meanwhile, the typical annual rent increase nationally fell to zero in June for the first time since the pandemic began, after peaking at 17.8% in 2021, according to Apartment List, a rent information aggregator and research firm. In September, rents fell 1.2%.
Vacancy rates are rising, said Alexander Hermann, a research associate at the Joint Center for Housing Studies at Harvard University.
“You’ve had this huge rush to build apartments in the last couple of years, and projects are bigger and bigger. It’s more common now to be building 50 or more units,” he said. “You can start to see where new supply is coming online, you see starker and stronger rent decreases.”
Federal statistics, which don’t track active construction below the regional level, show that construction hasn’t been higher in the Northeast since 1987 or in the Midwest since 2005, and it’s at all-time highs in both the West and South. A growing share of the country’s housing construction is in the South, up from 40% in 2017 to 46% in 2022.
In some places, rents are falling back a little, but they’re still plenty high compared with just a few years ago. In Texas, Austin has seen rents drop more than 6% for the fiscal year ending in September to $1,734 for a two-bedroom — but that’s still up almost 20% from 2020, according to…
Read the full article here
