Dreams of tall buildings are coming down to Earth due to a slowdown in construction. The US is feeling the aftermath of the largest apartment construction boom in decades, leaving many developers with empty lots and unstarted projects. Higher interest rates and rising construction costs have significantly strained development nationwide.

• Yardi Matrix data shows the average time between construction authorization and the start of construction has ballooned to nearly 500 days — a 45% increase since 2019.
• Meanwhile, the Census Bureau notes that multifamily building starts have plummeted to an annual rate of 322K units in Apr. 2024, the lowest April rate since 2020.

Cementing the future: Developers across the country are facing stagnant rents and a slow market, leaving little financial incentive to build. Local resistance from NIMBY (Not In My Back Yard) groups adds to the challenge, especially in rapidly growing states. Despite these setbacks, cities like Austin, Seattle, and Minneapolis are scrapping restrictive building policies that have hampered construction. This proactive approach has helped spearhead strong construction activity — but it’s hard to say if other cities will follow their example, especially in a market like this.