Despite the federal government shutdown leaving industry analysts without fresh monthly construction data from HUD and the U.S. Census Bureau, Yardi Matrix is stepping in with a clearer picture of what’s ahead for the multifamily sector. The firm now expects a stronger pipeline of apartment development to deliver new units into the market across the next three years.
In its latest Q4 forecast update, Yardi reported that a “larger-than-expected under-construction pipeline” is driving upward revisions for new apartment deliveries in 2025, 2026 and 2027.
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Even with that revision, the size of the overall multifamily pipeline remains slightly compressed. At the close of the third quarter, under-construction supply fell 5.1% quarter-over-quarter to approximately 969,000 units. The firm’s current dataset also shows that new supply peaked in 2024 at 685,005 units, marking a dramatic 53.7% jump from 2021 — one of the fastest growth periods in decades.
Yardi Matrix now projects:
YearUpdated Forecast% Change This Quarter2025~585,000 units+6.8%2026~441,000 units+2.5%2027~407,000 units+12.8%
With the average development timeline running around 24 months, units now breaking ground would likely begin leasing in 2027.
Yardi says it is now “increasingly likely” that developers will launch 400,000 starts in 2025, a considerable jump from earlier expectations of 350,000 to 375,000 starts.
“This year’s improved new-development activity relative to 2024 is the primary driver of this quarter’s increase in 2027’s forecast new supply,” Yardi Matrix said in the report.
Additionally,
“Both Matrix and Census Bureau data indicate that multifamily construction starts through the end of Q3 2025 are running above the pace recorded in 2024,”
the report noted.
Even as borrowing costs remain elevated, capital is still flowing.
“Multifamily housing starts are continuing to rise into 2025 and 2026 despite the 10-year Treasury yield remaining above 4.0% due to a combination of strong demand fundamentals, supply constraints and policy support,”
said Doug Ressler, manager of business intelligence at Yardi Matrix.
Persistent household formation, limited for-sale housing options, and demographic demand from renters continue to keep developers engaged. Meanwhile, shifts in federal and local policy targeting affordability also encourage building.
Yardi’s supply forecast includes market-rate, senior, single-family rental build-to-rent homes and mixed-affordable multifamily. From 2025 to 2027:
This diversification aims to support economic mobility and suburban renter growth.
Beyond 2027, Yardi sees delivery volumes continuing upward:
The firm expects broader economic stability to push projects forward:
“Yardi Matrix continues to expect slower but still positive economic growth as well as a moderate reduction in short-term interest rates to support new-development activity in 2026 and beyond,”
the report said.
Despite market volatility, rising insurance rates, and cost challenges, developers show no signs of retreating from the U.S. rental housing shortage. Strong demand and strategic investment are keeping cranes in the air — enough to reshape supply dynamics through the end of the decade.
Originally reported by Leslie Shaver in Multifamily Dive.
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