The apartment-building boom is over, at least for now.
Privately owned housing starts fell to a seasonally adjusted annual rate of 1.18 million in May, down 15.4% from April, the Census Bureau reported. Multifamily led the slide: starts on buildings with five or more units plunged 41.6% to 284,000, the weakest pace since November 2024. Single-family starts slipped 1.9% to 882,000.
A Sharp Drop in Multifamily
The multifamily figure swings hard month to month, but the trend is clear. A record wave of apartments that broke ground in 2022 and 2023 is finishing and leasing up, softening rents across many Sun Belt metros. With rent growth flat and financing costs high, developers are pulling back on new starts rather than adding to the glut.
What’s Dragging Starts Down
Permits tell the same story. Authorizations for buildings with five-plus units ran at 474,000 in May, well off the 2022 peak. High interest rates, cautious construction lenders and materials costs still climbing near 10% year over year have squeezed the math on mid-market rental deals.
Where Building Still Pencils
Not every project is stalling. Well-capitalized towers in supply-constrained coastal markets keep moving, like the 748-unit 201 Hudson rental tower on the Jersey City waterfront, where a deep-pocketed equity partner made the deal work. The read for 2026: capital is flowing to a smaller set of trophy deals while the broad middle of the market waits for rates to ease.
Full figures are in the Census Bureau’s New Residential Construction report.