The skyline is growing, and so are hopes for the housing market. After years of underbuilding following the 2008 financial crisis, things are turning around. In August, a record annualized 759K multifamily units were completed — a 39% jump from the previous month. This boost in housing construction is aimed at addressing the long-standing shortage caused by a record national population and a lack of supply.

• With ~670K apartment units scheduled for completion this year — a ~50% increase from 2023’s 36-year high — supply may soon meet or even exceed demand in some markets.
• On the single-family side, housing starts surged 15.8% to a seasonally adjusted annual rate of 992K units, defying expectations and rising 5.2% year-over-year.

Building boom or bust? The boom in both multifamily and single-family construction could bring relief to renters dealing with high costs. While this shows confidence from builders, there’s also concern about potential oversupply in some areas, which could cause developers to pause projects. On the bright side, the Fed’s interest rate cuts are expected to reignite construction. Despite the potential boost from lower mortgage rates, the National Association of Home Builders warns that “builders will face competition from rising existing home inventory in many markets as the mortgage rate ‘lock-in’ effect softens with lower mortgage rates.” This highlights the ongoing challenge of balancing housing supply with affordability.