The deluge of new apartments flooding the Metro Atlanta market has turned the tables on landlords, who are granting renters more incentives and lower rents.

But with developers hitting the brakes on new projects as financing grows cold, the upper hand may flip back to landlords by late next year.

Developers are underway with 18,500 new apartment units in Metro Atlanta, pushing the region to fifth place in the U.S. in terms of construction volume, according to an August Yardi report.

A bulk of the new supply is springing up in the suburbs. The 13,000 new units coming up in those areas are increasing the existing multifamily stock by 5%, according to Yardi Business Intelligence Manager Doug Ressler. Anything over 3.5% is considered robust.

The rush of supply has forced developers to offer more perks to prospective renters, typically in the form of free rent that can span months, and in some areas of the metro area has forced rates downward. The dynamic is allowing renters to lease higher-quality apartments for the same rent.

“It may be a good time for renters to snag an amenity-rich apartment that previously may have been out of reach,” said Crystal Chen, who wrote Zumper’s August report on the multifamily market.

Every major submarket in Metro Atlanta experienced rental rate declines year-over-year in August, with rents dropping anywhere from 4.8% in Forest Park to a whopping 22% in Decatur, according to Zumper. There was an 8.9% drop in Alpharetta, a 6.3% fall in Atlanta, an 11% drop in Roswell and a nearly 10% drop in Sandy Springs, where GID Development Group is building almost 600 new units for its High Street Atlanta Apartments.

“It’s Economics 101. It’s decelerating rents and concessions are increasing,” Ressler said. “That’s going to make it a very renter-friendly market.”

The share of landlords offering concessions has ballooned nationally from a low of 19.4% in July 2022 to 33.6% in April of this year, according to Zillow.

More than half the rental listings in Atlanta, Raleigh, Charlotte, Salt Lake City, Nashville and Austin include some form of renter incentive, Zillow reported. The Atlanta metro area saw a 14.5% spike in incentives on listings year-over-year in August.

"Builders have stepped up and built an incredible number of homes in response to soaring rents during the pandemic, and renters are now seeing the benefits," Zillow Chief Economist Skylar Olsen said in the report. "Now is a great time for renters to find a deal, with more new apartments hitting the market than at any time in the past several decades."

Independence Realty Trust Inc. is offering incentives ranging from three weeks to two months of free rent in Atlanta, Raleigh, Nashville and Huntsville, Alabama, Senior Vice President Janice Richards said on an Aug. 1 earnings call.

And Mid-America Apartment Communities Inc. Executive Vice President Tim Argo said during an Aug. 1 earnings call that “Midtown Atlanta probably [is] our worst concessionary environment right now, sometimes pushing three months where there are lease-ups.” Mid-America reported rents falling between 8% and 9% for new leases in the region.

But Ressler said the fair weather for apartment renters likely won't last. New apartment starts are quickly falling across the U.S.: By 2026, developers will be underway with 350,000 versus more than 500,000 today.

With the dropoff in new development, Ressler said Yardi is predicting rents will rise and concessions will fall off by as early as late 2025.

The ingredients for increasing housing demand are not abating, Ressler said. During the pandemic, non-native population growth in the U.S. drove people in spades to rental homes and apartments, especially since many don’t have the ability or credit record to buy homes. That trend is still in place, Ressler said, and is co-mingling with the Gen Z population — many of whom are now in their early and mid 20’s — who are moving out of their childhood homes and searching for places to live.

“So what you have is a double whammy. The demand for multifamily and rentals in general is increasing exponentially. Supply is not able to keep up with it,” he said. “Atlanta is a dynamic city. It’s a gateway city. Because of that, you’re going to see population growth and no real new supply to support it. What that means is prices are going to rise.”