Apartment construction boomed during the pandemic as the transition to remote work allowed more Americans to relocate, fueling rental demand across the country. But two years later, permits to build new units have receded to below prepandemic levels, according to a recent study by Redfin.
Researchers compared census data on permits issued for multifamily buildings of five or more units during three time periods: prepandemic (April 2014 to March 2020), mid-pandemic (April 2020 to March 2023), and post-pandemic (April 2024 to March 2025).
During the post-pandemic period, developers nationwide have received permits to build about 12 multifamily housing units per 10,000 people — a 6 percent decline from the prepandemic period and a roughly 27 percent decline from the pandemic building boom.
Among the 78 U.S. metro areas with populations of at least 750,000, the study found that 63 percent have scaled back on building apartments since March 2023.
One exception: high-demand cities in the Sun Belt region. Austin, Texas, topped all metros with about 65 permits issued per 10,000 residents. Cape Coral, Fla., was second, with about 60 permits per 10,000 people. Following were North Port, Fla. (53 permits), Raleigh, N.C. (just over 41), and Orlando, Fla. (just under 41).
Why is apartment construction soaring in the Sun Belt and plunging in other areas? In part, because builders there face fewer restrictions. “Austin is still booming because they are allowing for more types of homes to be built by loosening restrictions on things like minimum lot sizes,” said Daryl Fairweather, Redfin’s chief economist. Cape Coral, Fla., is helping to facilitate construction by expanding “utility access that opens up the opportunity to build housing in places that wouldn’t have been possible before,” she said.
Economic uncertainty has also played a role in the building decline. Ms. Fairweather said that developers have dialed back because of high interest rates, volatility in the cost of materials because of tariffs, and uncertainty over the effects of deporting construction workers, many of whom are undocumented.
