BiggerPockets Daily Multifamily Construction Grinds to Halt as Spring Market Slumps
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May 2, 2025 The U.S. housing market is experiencing a significant slowdown, with new multifamily construction permits down by 27%. While some areas like Austin are thriving, others such as Stockton face near halt in construction. Economic uncertainty and rising tariffs are causing buyers to hesitate, leading to decreased mortgage activity. Despite increasing online interest, buyer demand remains low, forcing sellers to adapt their strategies. This landscape poses unique challenges and opportunities for investors in a shifting economy.
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Nationwide Multifamily Construction Slump
- Multifamily construction permits dropped 27% from the pandemic peak, signaling a nationwide slowdown.
- Economic headwinds and oversupply in some markets are making new developments less financially viable.
Austin Leads Multifamily Permits
- Austin, Texas leads with nearly 65 units permitted per 10,000 people, defying the national slump.
- Strong population growth in Sunbelt cities keeps builders engaged despite broader weakness.
Many Metros Face Permit Declines
- Some metros like Stockton, CA have nearly zero multifamily permit activity due to weak rent growth and investor confidence.
- Nearly two-thirds of metros have seen permit declines since the pandemic, showing uneven demand.