Driven by a slightly larger than anticipated under-construction pipeline at the midyear point, Yardi Matrix has increased its multifamily completions forecast for 2025, 2026, and 2027.
The under-construction pipeline ended the second quarter with 1.027 million units, down 16.4% year over year and 6.5% quarter over quarter. This decrease was driven primarily by units in pre-leasing. At the end of the second quarter, 520,217 units were in pre-leasing, a 10.2% quarter-over-quarter decline and a 21% year-over-year drop. Yardi Matrix reported that most of this inventory should be completed over the next nine months.
Despite the decline, the level supports a modest increase in anticipated completions: 547,779 units in 2025, up 2.1% from the second quarter forecast and 430,061 units in 2026, up 1.8% from the second quarter. The forecast for 2027 was increased by 2.9% to 360,558 units due to better-than-expected starts through the middle of the year.
“The current forecast anticipates a modest reduction in starts for the second half of 2025 and a corresponding bottom in new supply in 2027 at 360,000 units. If construction starts in the latter half of 2025 remain at 2024 levels, subsequent forecasts for 2027 will need to be revised higher,” noted the report.
The declines in completions won’t be evenly distributed by property type. In 2026, market-rate apartment deliveries are expected to decline by 60% compared with 2024. This is a much steeper drop than the affordable and single-family build-to-rent sectors, which are expected to see declines of 33.3% and 55.7%, respectively, from the high levels seen in 2024.
The forecast remains unchanged for the later years, with an outlook of 410,205 units for 2028, 425,287 units for 2029, and 453,668 units for 2030. According to Yardi Matrix, it expects moderate economic growth and financial easing to support a rebound of new development, with increasing levels of new supply starting in 2028.
In its report, Yardi Matrix also highlighted that days under construction remain elevated for multifamily communities. Completion days for garden-style properties in the second quarter increased to a high of 722 days, or 24.1 months, above the trailing four-quarter average of 696 days, or 23.2 months. Completion days for mid-rise properties moderated to 804 days, or 26.8 months, which is in line with the trailing four-quarter average of 806 days, or 26.9 months. The number of days under construction also moderated for high-rise properties to 811 days, or 27 months. This is well below the trailing four-quarter average of 879 days, or 29.3 months.
