After years of record-breaking construction in the multifamily housing sector, the industry had anticipated a much-needed slowdown to help rebalance rent growth and vacancy rates. Yet new data from RealPage suggests that the anticipated pause may not be unfolding as hoped, raising concerns about a potential oversupply in key metropolitan markets.
According to Chuck Ehmann’s recent analysis of RealPage’s figures, multifamily construction starts surged 30.6% from May to June, reaching an annualized rate of 414,000 units. This represents a 25.8% increase compared to the previous year. However, this annualized figure is derived by multiplying the June monthly starts—36,700 units—by twelve, a method Ehmann cautions may produce volatile month-to-month interpretations. He also highlights data limitations, noting that the U.S. Department of Housing and Urban Development’s Survey of Construction samples permit activity from only about 900 jurisdictions out of nearly 20,000 nationwide, possibly skewing representativeness towards larger markets.
Further complicating the outlook, non-seasonally adjusted housing data displays a modest upward trend over four months, while multifamily permit levels remain relatively flat around 430,000 units with only a slight rise in June. This disconnect is puzzling, as building permits are typically a leading indicator of future construction starts, making the reliability of current growth signals uncertain.
After years of record-breaking construction in the multifamily housing sector, the industry had anticipated a much-needed slowdown to help rebalance rent growth and vacancy rates. Yet new data from RealPage suggests that the anticipated pause may not be unfolding as hoped, raising concerns about a potential oversupply in key metropolitan markets.
According to Chuck Ehmann’s recent analysis of RealPage’s figures, multifamily construction starts surged 30.6% from May to June, reaching an annualized rate of 414,000 units. This represents a 25.8% increase compared to the previous year. However, this annualized figure is derived by multiplying the June monthly starts—36,700 units—by twelve, a method Ehmann cautions may produce volatile month-to-month interpretations. He also highlights data limitations, noting that the U.S. Department of Housing and Urban Development’s Survey of Construction samples permit activity from only about 900 jurisdictions out of nearly 20,000 nationwide, possibly skewing representativeness towards larger markets.
Further complicating the outlook, non-seasonally adjusted housing data displays a modest upward trend over four months, while multifamily permit levels remain relatively flat around 430,000 units with only a slight rise in June. This disconnect is puzzling, as building permits are typically a leading indicator of future construction starts, making the reliability of current growth signals uncertain.
Ehmann summarizes the situation by stating that "multifamily construction does appear to be in a bottoming-out period currently, but the timing and magnitude of a recovery in multifamily construction is yet to be seen." Supporting this cautious tone, the seasonally adjusted annual rate of multifamily units under construction declined 19.6% compared to June 2024 and edged down 0.6% from May 2025. Moreover, completions of multifamily units dropped sharply, falling nearly 40% year-over-year and 21% month-over-month.
Regionally, the data paints a mixed picture. The Midwest recorded a 10.5% annual increase in multifamily permit rates, reaching 82,000 units, with the South up 4.5% to 250,000. Meanwhile, the Northeast experienced a 15.8% decrease to 39,000 units, whereas the West saw a slight decline of 1.1% to 108,000. When looking at annualized starts, the Northeast saw a dramatic 145.8% increase to 110,000 units, and the South rose 28.7% to 185,000 units. Meanwhile, the Midwest’s starts fell 37.9% to 34,000 units, and the West declined marginally by 0.9% to 85,000 units.