Permits for Apartments Drop 23% Will Rents Start Climbing?

Disclaimer: This blog is for informational purposes only and may reference third-party sources, including quotes or data used verbatim with proper credit. All efforts are made to ensure originality and avoid plagiarism. Readers should verify details independently and consult a licensed professional before making real estate decisions.

Market Snapshot

“Developers obtained permits to build 12.8 multifamily housing units for every 10,000 people in the U.S. over the past year—down from an average of 16.7 during the pandemic building boom.” (Katz, 2025) That’s roughly a 23 percent comedown from the boom and a touch below the pre-pandemic norm, signaling fewer fresh apartments in the near-term pipeline.

Why Permits Cooled

During the pandemic, remote work let many households relocate, pushing up rental demand and spurring a wave of construction. Completions then surged in 2024, vacancies rose, and rent growth softened—while borrowing costs climbed. That one-two punch made new projects tougher to pencil. Now the tide may be turning: “Rents have been falling or flat for much of the past two years, but last month, the median asking rent rose 1.7% from a year earlier.” And as Redfin Senior Economist Sheharyar Bokhari notes, “Asking rents may now be ticking up because the pool of new apartments renters have to choose from is shrinking while demand for rentals is growing.” (Katz, 2025)

Leaders and Laggards

“North Port, FL and Austin are issuing more multifamily permits than any other metros Redfin analyzed, while Stockton, CA and Bakersfield, CA are issuing the fewest.” (Katz, 2025) Beyond the headline, the table shows strong recent permitting in places like Cape Coral, Raleigh, and Columbus, while several Western metros have slowed materially. As the report puts it, “It’s actually metros in the West that are currently leading the decline in multifamily permits.” (Katz, 2025)

What it could mean for renters, buyers, sellers, and investors

• Renters: If fewer projects start, today’s concessions may fade. Compare a 12–24 month rent outlook with ownership costs; even a small rate dip or seller credit can change the math.

• Buyers: Thinning future rental supply can support demand for starter condos and townhomes. Lock a rate strategy (float-down, buydown, or re-fi plan) before shopping.

• Sellers: Leaner new-rental options can funnel qualified buyers to move-in-ready homes near jobs, transit, and top schools. Maximize presentation and pricing precision.

• Investors: Underwrite conservatively on rates, taxes, and insurance, but watch for firmer effective rents as deliveries ebb. Submarkets with high incomes and limited pipelines stand out.

The Orange County Lens

The West’s slowdown matters locally. In the most recent year of data, major nearby metros posted modest multifamily permitting relative to the boom: Los Angeles at 9.7 permits per 10,000 people, San Diego 23.6, Riverside 8.4, San Jose 4.6, San Francisco 9.3, and Sacramento 10.5, with Stockton at 0 and Bakersfield at 0.9. (Katz, 2025) A slimmer SoCal pipeline can gradually firm rents and keep for-sale demand resilient in well-located Orange County neighborhoods—especially for renovated homes, townhomes, and condos that offer payment stability versus rising rents.

Methodology in Brief

Findings come from a Redfin analysis of U.S. Census Bureau building-permit data for multifamily properties with five or more units. “Past year” reflects the average monthly figure from July 2024 through June 2025; “pandemic period” averages July 2020–June 2023; “pre-pandemic” averages July 2014–June 2020. (Katz, 2025)

Bottomline

Permits are down, supply is set to thin, and demand isn’t going away. If you’re weighing a move, trade-up, downsize, or investment, let’s tailor a data-driven plan to your timing and goals. Whitestone Real Estate can help you navigate rates, pricing, and neighborhoods so you can act confidently in today’s shifting market.

Reference: Katz, L. (2025, August 14). Permits to Build U.S. Apartments Have Fallen 23% Since the Pandemic Construction Boom. Redfin News.