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decrease in construction on multifamily units across the country is significantly impacting the real estate market. According to the Wall Street Journal, developers were previously building apartments at a feverish pace during the pandemic to meet demand, but are now easing up due to difficulties in securing financing for projects. In July, the annual pace of multifamily construction starts decreased by 22% compared to the previous year, as reported by the U.S. Census Bureau. This is a significant drop from the peak reached in April 2022, which was down by 41%.

    Two years ago, rents were soaring, leading more builders into the sector and eventually causing an oversupply. This year, approximately 610,000 units are expected to be delivered, according to CoStar, which is the highest level of completions since the 1980s. However, annual completions are projected to decline in the next two years, with only slightly higher deliveries in 2025 and 2026 compared to 2024's projections.

    Hamilton Point co-founder Matt Sharp believes that all new construction will finish in the next few months, and no new projects will come online for the next two or three years. This reassessment of supply and demand in the market is expected to benefit owners in terms of both rent profits and property values.

    Institutional players are getting involved in the sector due to the slowdown in construction and expected increase in rents. KKR, Brookfield, and Blackstone are among the asset managers making billion-dollar plays in the sector this year. In June, KKR spent $2.1 billion on 18 apartment complexes, marking a record multifamily deal for the private equity giant. Lennar's apartment-building division, Quarterra Multifamily, was the seller of the 5,200-unit portfolio.