The supply of new apartments is drying up — and that's going to drive up your rent.

But as the cost of building has increased, the number of cranes on the horizon has dwindled. Formerly eager developers are cutting back on fresh construction plans, laying the groundwork for another apartment squeeze. In other words, the good times for renters are running out.

Time's not up just yet. Developers are projected to deliver another half a million new apartments this year, down slightly from 2024, which should force property managers to focus on keeping their buildings full instead of jacking up rents. The outlook for renters, though, turns gloomier once you look at 2026 and beyond. Apartment supply boomed over the past few years, but demand kept pace — there's no glut of empty units. And the construction pipeline has slimmed down significantly since the glory days of cheap money, when it was easier for developers to secure loans for new projects. While plenty of rentals opened their doors in 2024, apartment builders broke ground on the fewest units in more than a decade.

Translation: Snag those apartment deals while you can. They probably won't last much longer.

The past few years have been chaotic for apartment dwellers. Demand for apartments soared in 2021 as renters upgraded to bigger places, moved out of their parents' houses, or said goodbye to roommates in favor of solo living. This surge in "household formation" pushed up rents even as people decamped from crowded cities to single-family homes in the suburbs. Zillow found apartment rents rose by more than 20% nationally from 2020 through 2022. At the same time, though, developers were setting the stage for a reversal. At one point in 2022, more than a million new apartment units were under construction across the country. The rush of new builds came to fruition over the past two years: According to RealPage, developers opened a total of 440,000 units in 2023 and a record 588,900 last year, with another 500,000 expected to become available in 2025.

All those new buildings have kept prices in check; as the rental-housing economist Jay Parsons puts it, they "did what supply is supposed to do." With lots of new units on the market, renters have more choices and are less likely to tolerate steep rent hikes. Yardi Matrix's data indicates year-over-year rent growth has stayed under 1% over the past 16 months, well below the double-digit jumps of 2022. Landlord concessions — the months of free rent, free parking, and gift cards used to attract and retain tenants — are back in fashion. At the end of 2024, almost 13% of units nationwide were offering concessions, pretty close to the all-time highs from the early months of the pandemic, when hardly anyone wanted to move. Read more...