New apartment construction drops 27% in 2026, but the Northeast defies the trend

Apartment construction across the U.S. is dropping sharply in 2026. An estimated 442,395 new apartments are expected to open this year — a 27% decline from last year’s 605,768 and the first time in four years that new rentals have fallen below the 10-year average of roughly 466,000. But, the slowdown isn’t hitting everywhere equally: In fact, the Northeast is the only region where building activity is actually increasing. The region is experiencing a 20% growth in newly built homes, led by a surge in and around New York City.

The national decline doesn’t necessarily signal weaker demand for rental housing. Instead, the market appears to be moving beyond the exceptionally large post-pandemic construction wave. For renters, fewer new apartments opening could mean a smaller selection in some markets.

That said, in areas where a large number of apartments have recently opened, renters will still find plenty of new homes to explore. But in markets where construction is slowing, options could tighten heading into 2027.

The South remains the country's largest source of new apartments

According to our data, the South is expected to account for 47% (208,085 units) of all new apartments opening nationwide in 2026. It's worth noting that the region's steady population and employment growth have helped make it an attractive destination for apartment developers. And, even as construction slows in some of its hottest markets, the South continues to draw development activity thanks to growing populations, more developable land than many coastal areas and regulatory environments that make it easier to build.

For renters, that ongoing building activity translates into more apartments to compare, newer amenities and a wider variety of floor plans and locations to choose from.

Unsurprisingly, Texas and Florida lead the region's apartment construction activity with an estimated 56,394 and 50,392 new units, respectively. Together, the two states account for more than half of the South's new apartments.

Not to be outdone, North Carolina and Georgia also rank among the region's most active states, with 25,109 and 17,323 newly built homes, respectively, further adding to an already wide range of choices for renters in surrounding areas.

At the same time, the West is on track to deliver 101,400 new rentals by the end of 2026, accounting for 23% of all new construction nationwide. Much of that activity is concentrated in California (38,201), Arizona (19,245) and Washington (12,772). Of course, these states are home to some of the country's largest rental markets. Moreover, high housing costs and growing demand mean new apartments are especially welcome — giving renters in these markets more options as new buildings open.

Meanwhile, unlike the rest of the country, the Northeast will bring more new rentals to the market than it did last year — specifically, 79,426 new units. Despite more residents moving to other states than arriving from them, rental demand remains strong enough to support the only year-over-year increase in building activity among the four U.S. regions.

To that end, the Northeast is projected to account for nearly 18% of all apartments opening in 2026, overtaking the Midwest in its share of national construction activity. New York and New Jersey stand out as particularly active markets, with 30,171 and 19,289 new apartments, respectively.

In contrast to the construction boom in the South and West, the Northeast has historically had fewer apartments come to market due to complex permitting processes, restrictive zoning and high construction costs. However, that's now changing: Projects that broke ground during the recent demand surge are now set to open, giving renters in the region more choices than they've had in years.

As a result, renters in the Northeast are seeing new rentals open at a pace that the region hasn't experienced in years, whereas renters in other parts of the country may benefit from deals in buildings that recently opened and are still looking to fill up.

Lastly, the Midwest is expected to account for about 12% of new developments nationwide, with 53,484 units scheduled to open.

The New York metro area is building more apartments than any other market

With 38,825 apartments scheduled to open by December, the New York City metro area holds its position as the country's most active market for new construction. 

The metro is also among the few major markets where apartment construction is increasing with 11.4% more new apartments expected to open here compared with last year. Namely, persistent undersupply and rising housing costs continue to support new construction, especially where zoning changes, redevelopment opportunities or housing incentives make projects financially viable. 

More precisely, the Brooklyn, NY, metro area is set to introduce 13,011 apartments — more than any other individual location in the country. Neighboring Queens, NY, and Manhattan, NY, are set to add 4,072 and 3,944 apartments, respectively. Across the river, Jersey City, NJ, is projected to see a whopping 807.4% increase in new supply from last year to reach 4,637 rentals. 

In second place, the Dallas metro follows with 20,392 apartments — 45.1% fewer than last year. Here, Fort Worth, TX, and Dallas proper account for the largest portions with 4,059 and 4,015 apartments, respectively. The decline reflects the metro's position in the construction cycle: Dallas-Fort Worth delivered an exceptionally large number of apartments during the recent building boom, and with so many new apartments opening in recent years, renters in the area now have more options to choose from.

Likewise, the Phoenix metro area will welcome 17,293 newly built homes to rank third nationally. Phoenix itself accounts for the largest share at 6,013 apartments, followed by three other Arizona locations — Gilbert (1,647), Mesa (1,612) and Glendale (1,187). This particular metro remains attractive thanks to continued employment growth and a large renter base, although building has slowed after a significant wave of newly built apartments. 

Next, the fourth-largest market, the Los Angeles metro area, will see 14,643 rentals open — a 7.7% decrease from last year. Much of the activity is concentrated in the city of Los Angeles (7,828 apartments), followed by Irvine, CA (1,756). As you might expect, high land costs, lengthy approvals and limited development sites restrict the pace of construction, but the region's housing shortage means apartments in well-connected neighborhoods tend to move quickly.

But not every California market is slowing down. San Diego is among the few major markets where building activity is increasing, with new apartments projected to rise 18.2% compared to 2025. Much of the new supply is concentrated in San Diego, where 4,145 apartments are scheduled to open. Strong demand, limited supply and a diverse employment base in technology, defense, health care and life sciences all support the increase. 

Another market moving against the broader slowdown is Boston, where 8,350 new apartments are expected to open — a 2.4% increase from last year. Specifically, Boston proper is set to account for 1,145 apartments. A large population of students and young professionals — combined with a concentration of universities, health care institutions and technology employers — continues to support rental demand.

Among individual cities, Brooklyn is building the most apartments

The metro rankings show where apartment development is concentrated: At the individual-location level, Brooklyn, NY, takes the top spot, with 13,011 new apartments scheduled to open — a 37.3% increase from last year. 

Brooklyn's strong transit access, proximity to Manhattan, NY, and ongoing redevelopment make it one of the most in-demand rental markets in the country. It also offers more room for large residential projects than Manhattan's increasingly limited development sites. 

Within New York City, Queens, NY, is also a major contributor with 4,072 apartments under construction. Here, redevelopment and rezoning in several neighborhoods have created additional housing opportunities, and the borough's extensive transit network supports continued construction. 

Ranking third among individual cities, Los Angeles has 7,828 new apartments — a 7.3% increase from last year. Persistent renter demand driven by the city's job market, lifestyle appeal and a long-standing gap between housing supply and population growth gives developers a strong incentive to build despite elevated costs. 

Then, two more Northeastern cities make the top 20 — Philadelphia at #8 and Jersey City, NJ, at #10. Philadelphia is set to add 5,617 new units (a 15.6% increase), combining a large renter base with lower development costs than many nearby Northeast markets. Meanwhile, Jersey City's direct access to Manhattan, NY, and large waterfront redevelopment sites continue to drive growth. 

Notably, Texas continues to dominate the city-level rankings with five cities among the country's 20 busiest locations for construction activity. Last year's top performer, Austin, ranks second this year with 8,147 new rentals. It's joined by: 

• Houston at #5 with 6,396 apartments 
• San Antonio at #6 with 6,098 apartments 
• Fort Worth at #14 with 4,059 apartments 
• Dallas at #15 with 4,015 apartments 

The state's strong presence reflects the scale of its major metros and the large supply of new apartments created during recent years of population and employment growth. 

Where is apartment construction growing the fastest?

While the largest construction totals remain concentrated in major markets, the fastest growth in new apartment construction is spread across all four regions, although the Northeast leads with eight metros in the top 20. The South and West each contribute four to five of the biggest gains, particularly among smaller and mid-sized metros and the Midwest with three.

But, the biggest jump belongs to the Syracuse, NY, metro area, where apartment construction is projected to increase 787.4% from last year. The growth is closely tied to major investment around the Micron semiconductor project, which is boosting housing demand as anticipated jobs reshape central New York. 

In second place, the Trenton, NJ, metro sees an increase of 406.4%. Its location between the Philadelphia and New York metro areas gives renters access to employment centers at lower housing costs. 

Staying in the Northeast, the Buffalo, NY, and Rochester, NY, metro areas highlight developers' renewed interest in New York with new apartments increasing by 215.6% and 198.3%, respectively. Lower costs and downtown revitalization are driving new apartment construction in both markets — and renters there will find more newly built rentals in walkable, revitalized neighborhoods. 

Rounding out the list, the Santa Rosa, CA, metro is projected to see construction activity increase 183.2% from last year. Again, high housing costs and limited supply drive the need for additional rental options.

Where new apartment construction is slowing down the most

Fewer apartments opening doesn't always mean fewer choices. Rather, in many of these markets, a large number of recently built apartments are still filling up — and renters may still find competitive pricing and move-in incentives as those buildings look to attract residents.

The metros seeing the sharpest slowdowns in construction are concentrated in the South, West and Midwest. The West accounts for nine of the top 20 declines, followed by the South with eight and the Midwest with three.

The largest drop belongs to Lakeland, FL, which claims 74.3% fewer apartments opening now than last year for 1,066 new rentals scheduled. In particular, development in Central Florida expanded rapidly during the recent population boom, and Lakeland benefited from demand spilling outward from nearby Tampa and Orlando. Even so, as financing conditions have tightened and the regional supply of apartments under construction has shrunk, fewer projects are expected to be finished this year. 

Staying in Florida, a 72.4% decrease in Jacksonville brings its total to 2,063 new rentals. The slowdown follows a period when a large number of new apartments opened. 

Further north and after a 66.1% decrease, Raleigh, NC, is set to add 3,278 new rentals. The metro saw heavy apartment construction during 2024 and 2025, so the market entered 2026 with fewer projects under construction.  

Out west, Salt Lake City is on track to add 2,814 apartments — a 63.5% decrease from last year. In this case, a large recent wave of supply (particularly in some urban areas) means that while the pace of construction is slowing down, renters will still find a solid selection of newer buildings.

Finally, and rounding out the top five declines, Austin, TX, is expected to see construction fall 60.4% from last year — though the metro is still on track to deliver 12,334 apartments by the end of 2026. The current slowdown represents a pause as the market keeps up with all the new apartments becoming available, as opposed to a loss of the metro's appeal.

FAQ

Methodology

RentCafe.com is a nationwide apartment search website that enables renters to easily find apartments and houses for rent throughout the U.S.

To compile this report, RentCafe’s research team analyzed new apartment construction data across 369 U.S. metropolitan statistical areas. The study is exclusively based on apartment data related to buildings containing 50 or more units. Metros with fewer than 300 units or fewer than two properties/buildings were only included in the totals, not in the rankings.

The Bronx and Staten Island were not included in the New York City metro data set.

Apartment data was provided by our sister company Yardi Matrix, a business development and asset management tool for brokers, sponsors, banks, and equity sources underwriting investments in the multifamily, office, industrial and self-storage sectors.

Apartment projections at the metro and city levels for 2026 were calculated based on a Yardi proprietary algorithm that includes confirmed and likely completions for 2026 based on the issuance of a certificate of occupancy. After the certificate of occupancy is issued, the status of the property can be considered “completed.”

Figures for 2017 through 2025 reflect final actual completions as confirmed by Yardi Matrix and replace the projections published in prior editions of this report. As a result, some annual totals — particularly for 2024 and 2025 — may differ materially from previously reported estimates.

Apartment projections are estimates and subject to change. Actual apartment completion dates depend upon a variety of factors and may change.

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