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Starts for new multifamily rental and condominium construction have dropped precipitously in 2023 from historically 

high levels in 2022, according to the Dodge Data & Analytics Supply Track construction pipeline. As shown in the chart 

below, since second quarter 2022, starts have declined at a relatively consistent rate. It is worth noting, however, that 

the number of starts in the second quarter of 2023 alone was around 100,000 units, according to Dodge Data & 

Analytics, which was a return to pre-pandemic historical levels. 

We believe the decline is due to a combination of short-term supply-side market saturation, the broader increase in 

interest rates making financing new construction significantly more expensive compared to recent years, and a 

reported pull-back in construction lending by many banks. 

As seen below, apartment rental units continue to be the predominant form of multifamily construction in 2023, which 

has been the case since 2008. Only 16,338 condo units were started during the first half of 2023, making up only 6.7% 

of starts, according to Dodge Data & Analytics. Furthermore, condominium starts are declining at a much faster pace: 

Apartment starts declined 36% year over year, as of second quarter 2023, while condo starts declined 58% during the 

same time period.

Census Bureau Starts Data Estimates a Greater Number of Units

The U.S. Census Bureau estimated that multifamily starts averaged 552,000 units annualized in the first quarter of 

2023, but this data includes condo properties and is extrapolated using an estimated timeline based on permits data. 

Nevertheless, we expect that Census Bureau multifamily starts will taper off in the second half of 2023 and end the year 

down 6.4% compared to 2022. 

While the level of supply remains above the levels seen during the depths of the Great Recession, overall starts remain 

well below the extraordinary levels achieved in the 1970s. For instance, in 1973, more than one million units were 

started.

Multifamily Economic and Market Commentary

AUGUST 2023

Mid-2023 Multifamily Construction Update 

Source: Dodge Data & Analytics, July 2023

Note: Q2 2023 project starts are preliminary estimates and subject to significant revision

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Thousands

National Condo and Apartment Units Started

Apartments Condos
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Multifamily Economic and Market Commentary

2023 May Be a Record Year for Completions of Apartment Units

According to the Dodge Data & Analytics Supply Track construction pipeline data, the number of apartment 

units completed across the country may reach a record in 2023. As illustrated in the chart below, nearly 

730,000 units are underway with completion dates expected in 2023, though only 164,000 were completed 

year to date through April. That’s compared to full-year totals of 479,000 units in 2022 and 395,000 units in 

2021. The overall pipeline underway is slightly lower than it was a year ago: As of July 2023, 1,116,000 units 

were underway, compared to 1,141,000 in July 2022. With supply chains operating more efficiently in 2023 

than in 2022, we expect more units will complete this year than in 2022. 

Class A Supply Comes Online and Pressures Rent Growth, Particularly in Large Metros

Multifamily rental development continues to be concentrated in some of the largest metros in the country, as 

seen in the table on the next page. New York City continues to be the most active metro in the country, with 

nearly 150,000 units either recently completed or underway. Dallas and Austin have both overtaken 

Washington, DC, with Dallas at 74,000 units, Austin with 66,000 units, and Washington, DC with 60,000 units 

either recently completed or underway. Houston and Atlanta are also expecting at least 50,000 units each will 

be completed this year. Seattle, Los Angeles, Phoenix, and Miami are expected to round out the top 10.

While much of the current development underway is concentrated in the largest metros, in most metros it is 

further concentrated in only a few submarkets, particularly in more dense and urban-focused submarkets. 

Additionally, most units being developed are more expensive, Class A-type apartment units. We believe this 

potential oversupply of Class A units may depress rent growth relative to Class B, particularly through 2024. 

For example, CoStar, Inc., is forecasting that Class B year-over-year rent growth will be 3.3% for the year 

ending Q2 2024, compared to the projection for Class A of 2.6% for the same period. 

* Projected completions. Source: Dodge Data & Analytics, July 2023

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National Condo and Apartment Completions and Expected Completions

Apartments Condos
Metro 2022 2023 2024 Beyond Total

New York 39,154 63,136 34,118 12,493 148,901

Dallas 16,252 26,934 27,131 3,823 74,140

Austin 17,080 28,489 18,161 2,193 65,923

Washington, DC 20,428 20,242 15,946 3,745 60,361

Houston 15,058 21,366 18,288 1,809 56,521

Atlanta 9,768 25,509 14,573 2,851 52,701

Seattle 15,100 22,205 11,007 1,350 49,662

Los Angeles 11,626 20,913 10,919 4,088 47,546

Phoenix 15,016 17,127 12,672 2,099 46,914

Miami 9,459 15,670 12,649 5,851 43,629

Orlando 10,809 21,299 9,394 345 41,847

Denver 10,185 16,929 13,315 1,067 41,496

Nashville 9,803 16,723 10,525 1,414 38,465

Minneapolis 12,934 15,238 7,192 929 36,293

Philadelphia 9,069 19,097 7,126 845 36,137

Boston 11,304 13,827 7,944 2,922 35,997

Tampa 8,930 10,925 11,513 31,368

Charlotte 8,550 12,293 7,059 1,819 29,721

Raleigh 3,776 9,624 10,605 826 24,831

Chicago 6,277 9,981 6,297 1,199 23,754

San Antonio 6,794 9,222 6,642 378 23,036

Salt Lake City 5,023 11,549 4,775 915 22,262

Fort Worth 6,840 9,308 4,596 584 21,328

Newark 5,674 9,424 3,753 1,195 20,046

Jacksonville 5,371 9,317 4,949 396 20,033

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Multifamily Economic and Market Commentary

Source: Dodge Data & Analytics, July 2023

New Supply Is Elevated in Terms of 

Inventory in Many Metros – But 

Not For Long

According to the Dodge Data & Analytics 

Supply Track pipeline, the number of units 

underway is elevated in terms of existing 

inventory levels, as seen in the chart 

below. Metros such as Austin, Dallas, 

Jacksonville, Miami, Nashville, Raleigh, 

and Salt Lake City all currently have 

pipelines at or above 10% of inventory. 

However, we believe that supply and 

demand will rebalance fairly quickly due 

to expected demographic trends, job 

growth, and household formation 

increases. 

Units Recently Completed and Underway

Source: Dodge Data & Analytics, July 2023

Note: Q2 2023 project starts are preliminary and subject to significant revision

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Units Underway % of Market Units

Units Underway Thousands

Units Underway Units Underway % of Market Units

Multifamily Units Underway and Percent of Market Units – Select Metros
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Avg. Units per project

# Projects Started

Average Number of Units per Apartment Project Started

Average Project Size Projects Started

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Multifamily Economic and Market Commentary

The financing costs of new developments have increased substantially since interest rates began increasing in early 

2022, another reason why we expect a slowdown in starts activity. Additionally, we believe the more expensive Class 

A segment may see a disproportionate uptick in vacancy rates, as well as modest rent growth, as the upcoming 

surge of completions is almost entirely comprised of these types of units. 

Multifamily Supply May be Peaking

Source: Dodge Data & Analytics, July 2023

Note: Q2 2023 project starts are preliminary estimates and subject to significant revision

Since the onset of the pandemic, demand among renters for units with more space and amenities has increased; as 

a result, we believe it’s possible that future demand may be able to keep pace with this new supply. Despite the 

potential oversupply in the short term, there is still an ongoing shortage of housing, particularly affordable, in many 

places across the country. We expect demographic trends to increase demand for housing of all types in the long 

term. 

According to the Dodge Data & Analytics Supply Track pipeline, the decline in starts discussed above reflects that, while 

the number of units per project has increased slightly, the actual number of projects themselves has declined 

substantially in the first half of 2023, declining to 1,761 projects, down from 3,166 in the first half of 2022, as seen in the 

chart below. 

The average number of units per project increased year-over-year to approximately 129 for the first half of 2023, which is 

above the average of 111 units per project for the same period in 2022.

Projects Started Declining in 2023
Multifamily Economic and Market Commentary

5

Joseph Sleeper

Intern – Finance

Tim Komosa

Economist – Senior Manager

Multifamily Economics and Research

8/10/2023

Opinions, analyses, estimates, forecasts, and other views of Fannie Mae’s Economic and 

Strategic Research (ESR) Group included in these materials should not be construed as 

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