Amidst demographic shifts and lingering pandemic-impacts on the population and broader economy, the U.S. faces a pressing need to build 4.3 million new apartments by 2035, according to a new study commissioned by the National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC).
Based on research conducted by Hoyt Advisory Services and Eigen10 Advisors, LLC, commissioned by NAA and NMHC, the data include an estimate of the future demand for apartments in the United States, the 50 states and 50 metro areas, including the District of Columbia. For the purposes of this study, apartments are defined as rental apartments in buildings with five or more units. The data are available on the website www.WeAreApartments.org.
- Shortage of 600,000 apartment homes. The 4.3 million apartment homes needed includes an existing 600,000 apartment home deficit because of underbuilding due in large part to the 2008 financial crisis.
- Loss of affordable units. The number of affordable units (those with rents less than $1,000 per month) declined by 4.7 million from 2015 to 2020.
- Homeownership. Apartment demand also factors in a projected 3.8% increase in the homeownership rate.
- Immigration. Immigration is a significant driver of apartment demand, and levels tapered before the pandemic and have remained low. A reversal of this trend would significantly increase apartment demand.
- Texas, Florida and California. These three states account for 40% of future demand and will require 1.5 million new apartments by 2035.