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Apartment construction starts have already dropped 50 percent from their peak levels.
Jay Parsons believes the decline in apartment construction will continue through the fourth quarter and into 2027, describing the current environment for apartment developers as difficult due to high interest rates and limited access to equity capital.
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Freddie Mac recently paused new loans for New York City rent-stabilized apartments, while Fannie Mae made changes to account for rent freeze costs, according to a report from Jay Parsons. Earlier, Parsons observed that U.S. rental housing supply was slowing as demand remained high, with continued apartment absorption and rent growth seen in the market (link). These developments frame ongoing challenges for multifamily construction and lending.