Rents fall in Southern and Sun Belt cities as new apartment construction surges

Rents are decreasing in Southern and Sun Belt cities due to a significant increase in new apartment construction. In contrast, rents continue to rise in the Midwest and Northeast, where new multifamily housing is not keeping pace with demand. Approximately 500,000 new multifamily units are expected to be built this year, primarily in Southern and Sun Belt areas. This construction boom has led to a 1.4% drop in rents across 15 of 21 Southern markets over the past year. Despite falling rents in some regions, affordability remains a concern. Nationwide, average rents have increased by about 27% since October 2019, with Southern rents rising 33%. Developers are mainly constructing luxury apartments, limiting options for mid-priced housing.