As of November 2023, it was estimated that there were 988,000 homes under construction in multi-family buildings containing 5 or more units. This is in comparison to 680,000 single-family homes, according to US Census data. (Looking at the below graph, it's also interesting to see how the supply of single-family homes dropped off after the global financial crisis and multi-family apartments took off.)

All of this means that in 2024, the US is on track to complete more apartments than it has in many many decades. In fact, exactly similar to what we experienced here in Toronto, if you want to find a comparable multi-family supply number, you need to go as far back as the 1970s (see below). Of course, the US had fewer people back then, and so on a per capita basis, it was building more housing.

Still, all of this new supply is having an impact. Apartment List recently published its national rent report, over here. And overall, it found that:

Rent increases are currently being moderated by a robust construction pipeline expected to deliver a decades-high number of new apartment units in 2024.

More specifically, they found that the cities with the most supply are now seeing the largest rent declines:

Many of the steepest year-over-year declines remain concentrated in Sun Belt cities that are rapidly expanding their multifamily inventory, such as Austin (-7.4 percent year-over-year), Raleigh (-4.4 percent), and Orlando (-3.9 percent).

If you're an apartment developer, this is not what you want to see. It means that increased competition is creating downward pressure on rents and that vacancy rates are probably rising. But if you're someone looking to rent an apartment, this is exactly what you want to see. You want more affordable housing. And so, as a consequence, you want more homes to be built. Because when supply outstrips demand, this is what you get.

Charts: Apartment List

Apartment List's quarterly Renter Migration Report (Q4 2020) offers up some interesting insights into what may be playing out in the apartment sector right now. The most striking takeaway seems to be the surge in people looking for short-term rentals (leases of six months or less). And while the data has historically shown that those looking to move to a new metro are more likely to be looking for a short-term rental compared to those searching within their current metro, that spread really widened starting in the spring of last year. See above.

And when you drill even deeper, the most popular inbound destination -- at least according to Apartment List's search data -- seems to be Honolulu. In the second half of 2020, about 26.8% of users searching in Honolulu from somewhere else in the US were looking for a short-term lease. This is compared to 14.9% during the same time period in 2019. Intuitively this makes sense to me. If you're in lockdown and working from home, why the hell not do it from Hawaii? We've all have this same thought.

Apartment List goes on to speculate that this short-term rental spike could be an indication that the inbound and outbound flows we're seeing right now with certain cities may not be all that permanent. People are simply optimizing for the current environment. Though this data is representative of intent, rather than of leases consummated. Either way, that would be my guess. But who knows. Maybe some people will discover that surfing in the morning and working from the beach is a pretty enjoyable way to live.

Every quarter, Apartment List publishes something that they call their Rental Migration Report. What they do is use search data from their website to determine where their (registered) users are hoping to move to and from. Their first report of 2020 is now out and below is their list of the most attractive US metros. It is based on search data from June to December, 2019.

Now, it’s important to note that this is really only a form of intent — taken from one particular website. This list may not, and probably doesn’t, accurately mirror how and where people are actually migrating within the US. But it is still interesting to see what is top of mind for Apartment List’s users. (If there were multiple search inquiries during a visit to the site, they counted the first metro area.)

Beautiful mountains. Great snowboarding/skiing. And a burgeoning tech ecosystem. I am not at all surprised to see Denver at the top of this list.

Images: Apartment List