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Multifamily Market Commentary — October 2019

Multifamily construction pipeline update

Starts for new multifamily rental and condominium construction have remained robust since the end of 2014, with a 

minimum of 78,000 units started in each quarter, according to updated data from Dodge Data & Analytics. The number of 

new apartment rental units started during second quarter 2019 totaled approximately 95,100; this figure is up from 

91,600 in the prior quarter, though down from the average of 105,300 units started in each of the last three quarters of 

2018. An estimated 421,500 units were started during 2018; the vast majority remain in the multifamily rental category, 

while just 52,000 were condos. This trend continues to be true in 2019.

National condo and apartment units started

Source: Dodge Data & Analytics, October 2019

Census Bureau starts remain up

The Census Bureau’s estimated multifamily starts, which include condominiums, were up 12.6% year over year as of 

second quarter 2019, at an annualized rate of 411,000 units. Our Economic and Strategic Research Group forecasts that 

multifamily starts (2+ units) will remain steady in 2019 at about 373,000 units — down a slight 0.3% from 374,000 units 

in 2018 — but will then decline in 2020 to approximately 347,000 units. The overall level of multifamily construction 

starts continues to be well above the 1989-2008 historical average annual rate of 260,000 units started but remains well 

below the record 1 million units started in 1973 and 700,000-plus started in 1985.

Construction pipeline remains elevated

Dodge Data & Analytics’ pipeline data continues to show a robust level of new apartment rental units currently underway: 

More than 612,000 units are under construction as of October 2019 — up from 597,000 in January 2019 — as illustrated 

in the chart below. The number of condo units underway has remained generally steady, with approximately 60,000 units 

as of October 2019 — down slightly from approximately 61,000 in January 2019.

National condo and apartment completions and units underway

Source: Dodge Data & Analytics, October 2019

NOTE: Pipeline data is not an actual forecast of activity — it is a monitor of activity reported to date. As more projects are planned and tracked, figures in future periods might go up.

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Major markets see major supply; national supply shortage continues

 Units recently completed and underway

The metropolitan areas with the most active apartment 

development in the country continue to be New York, 

Washington, D.C., Dallas, Los Angeles, and Seattle —

each with more than 40,000 units underway. Boston, 

Atlanta, and Denver follow with slightly fewer units 

underway. Rounding out the top 10 are Chicago and 

Austin. 

While the short-term surge in supply in some of these 

metros might be ill-timed from a market-in-balance 

perspective, we expect nearly all of the multifamily rental 

housing being built today and over the next several years 

to be absorbed fairly quickly due to the demand created 

by these metros’ respective economic and demographic 

growth forecasts.

While we expect some of the markets in the table on the 

right will see some short-term deterioration as the robust 

supply is out-matched by somewhat moderated demand, 

on a national level, there continues to be a housing 

shortage for both multifamily and single-family 

properties. The level of housing construction since the 

end of the Great Recession, including the recent delivery 

surge of 2017 through 2019, has not been significant 

enough to satisfy the needs of a growing population and 

expanding economy. Source: Dodge Data & Analytics, October 2019

Average number of units per apartment project started

Source: Dodge Data & Analytics, October 2019

According to Dodge Data & Analytics, the number of projects started across the country peaked in the second quarter of 

2015 and has remained high since then, with only moderate volatility. A total of 936 projects were started during second 

quarter 2019 — up from 893 in the first quarter — as seen in the chart above. The average number of units also continues 

to be generally steady, with about 102 units per project. 

Highly supplied metros likely to see easing

As has been the case since 2014, new supply coming online through and beyond 2020 is concentrated in several metros, 

some of which we believe are likely to experience softness in occupancies. Steady demand continues to be expected, but 

the vast majority of new development will likely be in the more luxurious segment of these markets, and competing 

properties might see amplified softness. Rising vacancy levels and reduced or negative rent growth could affect the overall 

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# Projects Started

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Metro 2018 2019 2020 Beyond Total

New York 31,594 30,363 32,278 13,717 107,952

Washington, D.C. 15,469 17,609 16,770 9,421 59,269

Dallas 16,551 16,205 16,371 1,892 51,019

Los Angeles 17,341 15,269 11,275 3,844 47,729

Seattle 14,958 12,645 10,548 3,468 41,619

Boston 11,534 12,231 11,757 2,086 37,608

Atlanta 9,281 12,756 8,778 948 31,763

Denver 12,128 11,262 7,632 - 31,022

Chicago 9,202 11,710 6,427 2,611 29,950

Austin 7,880 11,540 7,693 1,767 28,880

Miami 6,800 11,017 7,431 421 25,669

Orlando 7,988 8,151 9,188 288 25,615

Minneapolis 7,407 7,598 9,342 840 25,187

Charlotte 8,261 6,037 6,201 1,598 22,097

Houston 5,169 6,537 8,116 1,878 21,700

Philadelphia 5,846 7,390 5,776 509 19,521

San Antonio 6,893 5,568 5,820 600 18,881

Phoenix 7,289 6,592 4,458 253 18,592

Oakland 3,432 7,282 5,863 575 17,152

Nashville 5,753 5,544 4,422 678 16,397

Portland 5,282 7,210 3,703 179 16,374

Tampa Bay 6,307 5,132 2,105 740 14,284

Raleigh/Durham 4,120 4,029 4,708 263 13,120

San Francisco 2,432 4,754 5,243 456 12,885

Columbus 3,628 5,015 3,663 360 12,666
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metro trend in oversupplied metros. However, this slowdown is expected to be modest and brief. Once the supply surge 

subsides, we expect the strength of multifamily’s underlying fundamentals to continue— including stable job growth and 

strong demographic trends — resulting in increased demand and a stable apartment market.

Tim Komosa

Economist Manager

Kim Betancourt

Director of Economics

Multifamily Economics and Market Research

October 2019

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Multifamily Economics and Market Research 

Group (MRG) included in these materials should not be construed as indicating Fannie Mae’s business prospects or 

expected results, are based on a number of assumptions, and are subject to change without notice. How this information 

affects Fannie Mae will depend on many factors. Although the MRG bases its opinions, analyses, estimates, forecasts,

and other views on information it considers reliable, it does not guarantee that the information provided in these 

materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information 

underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and 

other views published by the MRG represent the views of that group as of the date indicated and do not necessarily 

represent the views of Fannie Mae or its management.