The pullback in multifamily construction continues as U.S. apartment starts declined to approximately 55,000 units nationwide in the first quarter of 2026, a 73% decrease from the peak reached in early 2022 and the lowest quarterly level since 2011, according to a new report from CoStar and Apartments.com.
New development of any projects continues to be uncertain as market conditions remain challenging for the start of ground up projects.
“Slower rent growth, elevated financing costs and high development expenses have continued to limit new project feasibility across most markets. As new starts remain subdued, the national apartment construction pipeline is shrinking rapidly. The number of units under construction nationwide declined to roughly 579,000 in the first quarter of 2026, down more than 50% from its peak in early 2023 and broadly in line with mid 2010 levels,” the report says.
“Developers have pulled back sharply as weaker rent growth and higher financing costs weigh on project feasibility,” said Grant Montgomery, National Director of U.S. Multifamily Analytics at CoStar Group. “While completions remain elevated for now, the contraction in the construction pipeline points to more balanced supply conditions ahead.”
The report says the market is still absorbing completions from projects financed earlier in the cycle, though delivery volumes have begun to ease. Annual apartment deliveries peaked in 2024 and have declined by about 26% over the past four quarters.
Construction activity remains uneven – the Mountain and South regions continue to have the highest construction exposure relative to inventory, at about 3.3% and 3.2% of stock under construction, respectively.
At the market level, New York City has the largest absolute construction pipeline, followed by Dallas–Fort Worth. Miami and Charlotte currently have the highest construction levels relative to existing inventory, with more than 6% of apartment stock under construction, the report says.
