Permits for multifamily buildings are on the decline. Redfin analyzed data from the Census Bureau and found two main reasons for the drop in multifamily permits since the start of 2024. Those are higher interest rates and the recent uptick in construction—citing that about half of new apartments built by the end of 2023 were rented within three months, which is the lowest rate on record except for the start of the pandemic in the first quarter of 2020.
There were 13 multifamily housing units for every 10,000 people in the country for the first five months of 2024, which is down from 18, on average, during the same periods from 2021-23.
Cape Coral, Fla., witnessed the most permits at 27 per 10,000 people during the first five months of 2024, which is up from an average of 16 during the same periods during the pandemic. While just ahead of Greensboro, N.C., Austin, Texas, with 21 permits per 10,000 in 2024, saw a large drop off from the 40 permits per 10,000 as seen on average during the first five months of 2021-23.
The data points to rents declining in areas where construction increased during the pandemic. Austin had the third-largest drop in asking rents in May, sliding 7% year-over-year. Meanwhile, Jacksonville, Fla., (the third-highest permits issued during the pandemic years) witnessed rents drop 10% year-over-year in May.