Starts for new apartment projects of five or more units picked up in August, according to statistics released Thursday by the Census Bureau and the U.S. Department of Housing and Urban Development.

Roughly 403,000 units broke ground last month, a 15.8% increase year-over-year, according to Multifamily Dive.

New apartment construction began to cool in 2025, after exploding during the coronavirus pandemic thanks to low interest rates, high liquidity and a focus among tenants on improving the condition of the four walls they were staring at. Deliveries fell sharply in the first quarter of this year, the first decline in more than two years.

While the 15.8% jump represents an improvement from a year ago, it is a 6.7% decline from July, which was an unexpectedly strong month for starts. Multifamily permit rates dropped 2.8% last month, indicating a slower future pipeline. With the glut in new supply, landlords have been forced to drop rents in some markets, making new apartment construction less likely.

The apartment market has been experiencing something of a whiplash in recent months. On one hand, high interest rates have priced potential homeowners out of the housing market and toward rentals. However, slow rent growth, economic uncertainty, tariffs and an immigration crackdown by the Trump administration have raised construction prices and further muddied the picture for those wanting to break ground on new apartments.

This week’s decision by the Federal Reserve to cut its central borrowing rate by 25 basis points and an indication that more interest rate reductions are to come could spur development. Several economists forecast further turbulence in the housing market in the first half of 2026 before it experiences a mild rebound in the second half of that year.