Multifamily deliveries are expected to approach all-time highs in 2025, even as new construction starts have declined by an average of 10.4% in each of the past four quarters, Avison Young said in its Q2 2025 U.S. Multifamily Market Report. However, new supply is expected to drop by 57.3% next year.
At the same time, multifamily absorption levels are now on pace to surpass 2024 levels, according to Avison Young. Absorption in the first half of 2025 reached 51.5% of 2024 year-end totals as mortgage
rates remain historically elevated.
“Multifamily demand remains resilient in 2025, with absorption on track to eclipse last year’s record highs,” said Grant Hayes, manager, market intelligence. “While deliveries peak in 2025, a sharp pullback in activity is expected by 2026—while rent growth continues to slowly reemerge.”
The report cited 3% year-over-year rent growth for major markets such as Manhattan and San Francisco. Over the past two quarters, asking rent growth nationally has increased by 1.8%.
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