Multifamily permits are down 23% across the U.S. since the construction boom of the COVID-19 era, according to data from the Census Bureau analyzed by brokerage Redfin. However, the drop is not uniform, and in some areas of the country, development remains robust, in contrast to popular narratives about oversupply and stagnating markets.
According to Redfin’s analysis, developers received permits for 12.8 multifamily housing units for every 10,000 people in the country over the last 12 months (July 2024-June 2025). That represents a marked decline of 23.1% from an average of 16.7 permits since the dizzying days during and after the pandemic, meaning 2020-2023, when interest rates were lower and demand for remote work pulled people away from big cities.
Construction Back to Pre-Pandemic Levels
Texas and Florida, in particular, saw record construction of new apartments to keep up with demand. For perspective, the current figures represent a 1.1% decline from the average of the 13 years preceding the pandemic. In essence, multifamily development has returned to pre-pandemic levels.
The increase in interest rates and influx of unfilled new apartments curtailed the pace of building in many markets, Redfin reported. Despite that, July has seen the median asking rent of buildings with five units and above rise 1.7% from a year earlier, which suggests many of the previously available vacant units have now been filled, and demand is picking back up.
“Asking rents may now be ticking up because the pool of new apartments renters have to choose from is shrinking, while demand for rentals is growing,” Redfin senior economist Sheharyar Bokhari said in a press release. “Renters could see perks like free parking start to disappear if the balance of power shifts further toward landlords.”
Despite the national slowdown, parts of the Sunbelt have continued to experience construction growth, and this region has generally built new apartments at a faster pace than other parts of the country, notably California, which is facing a housing shortage.
Most Multifamily Housing Permits
According to the Redfin report, North Port, Florida, and Austin, Texas, permitted more multifamily housing than any other metro areas in the U.S. that Redfin analyzed. North Port granted permits to construct 65 multifamily developments over the past year per 10,000 people—the highest of all the metro areas surveyed by Redfin with populations of at least 750,000.
Having granted 63.6 permits per 10,000 people over the last year—the second-highest in the country—Austin seems to be experiencing a comeback despite its much-publicized falling rents.
Other high-ranking metros, according to Redfin, are fellow Sunbelt metros Cape Coral, Florida (also 63.6), and Raleigh, North Carolina (43.7), with only Columbus, Ohio (42) breaking the Sunbelt’s stranglehold on permits issued over the last 12 months.
California Permits Demand Drops Precipitously
Elsewhere in the country, the data is not as robust, with several metros surveyed showing a decline in post-pandemic multifamily permits.
The Californian cities of Stockton (-100%) and San Jose (-74.5%) experienced the greatest declines. That might be partly because California is notoriously slow in the permitting process. Colorado Springs, Colorado (-68.1%); Rochester, New York (-62.7%); and Philadelphia (-62.1%) also saw big decreases.
Oklahoma City Experiences 205% Increase in Apartment Permits, Underscoring High Demand
While Texas and Florida have been granting permits at a rapid pace, even cities in these states have struggled to keep pace with Oklahoma City, Oklahoma, which saw a 205% increase in permitting demand due to population growth, affordability, and the desire for city living. The construction of new retail centers and social service centers has accompanied new residential developments.
Other areas witnessing dramatic residential construction include Providence, Rhode Island (150%); Pittsburgh (131%); Cape Coral, Florida (126%), and Hartford, Connecticut (123%).
The Relationship Between Permit Demand and Rent Increases
Demand for new construction has a direct influence on rental increases. Redfin data shows that San Jose and Chicago experienced the largest rent increases in the country, while Jacksonville, Florida, and Austin saw the most significant declines.
Overall, the median U.S. asking rent increased 1.7% (a rise of $30) year over year to $1,790 in July, representing the biggest increase since 2023.
Rental increases are typically based on the balance between supply and demand. San Jose experienced a significant decrease in apartment permits, yet saw a substantial year-over-year rental growth of 8.8% in July, reaching $3,569, which indicates a high demand for housing here.
According to a Point2Homes report, most of the nation’s new apartments are being built in suburbs or exurbs, where there is more room for parking and amenity-rich new developments, as well as cheaper land. The report indicates that 203 metro areas have more renters than homeowners, with rental growth in Dallas outpacing that of all other metro areas. Five of the largest 20 metro areas—Boston, Baltimore, Dallas, Minneapolis, and Tampa—saw more renters in the suburbs than cities.
Surging home prices, coupled with high interest rates, have seen many residents preferring to rent rather than buy.
“Home prices have surged,” Doug Ressler, manager of business intelligence at real estate research company Yardi Matrix, a sister company to Point2Homes, told Business Insider. “On the other hand, rental prices have remained relatively stable or even decreased in some areas, making renting a more affordable option.”
Final Thoughts
As the dramatic growth in permitting in Oklahoma City demonstrates, demand for permits is highly fluid and heavily influenced by affordability. While certain major cities with established industries, such as Austin and San Jose, will always be sought after due to the tech industry, elsewhere, the demand for apartments depends on several factors: the cost of housing, the balance between in-person employment and remote work, and mortgage interest rates. Most of those issues remain unresolved.
Redfin’s figures represent the years since the pandemic, but as more companies demand employees return to the office and interest rates drop, we are likely to see the recent demand for suburban rentals fall, as people look to buy closer to the cities where they work.
As far as landlords are concerned, focusing on employment hubs where remote working or commuting is not an option is always a safe bet. These include hospitals, student rentals, and companies that have issued return-to-work orders. They are perpetually in demand, and while the barrier to entry is usually high, they will consistently perform over the long term.
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