The multifamily construction pipeline has taken a nosedive to numbers that haven’t been seen in a decade and a half, according to Apartments.com and CoStar.

Roughly 55,000 units broke ground across the U.S. during the first quarter, the lowest quarterly volume since 2011, as higher development and financing costs and a slowdown in rent growth have limited new construction.

Only about 579,000 units were underway at the end of the quarter, a 50% decline from the 2023 peak and also back to levels last seen in the mid-2010s.

The free fall in starts comes despite a record wave of office-to-residential conversions sparked by a looming wall of $213B in office loans maturing this year. There are 90,300 units underway via these types of conversions, a 28% increase over a record 2024.

Cities with the most apartment units under construction as of Q1 are New York City, with 43,000 units on the way, followed by 31,000 in Dallas-Fort Worth, which is line with the previous quarter. The cities with the highest development totals compared to the size of their markets, however, are Miami, Charlotte and Tampa, showing Sun Belt development is still alive and well despite years of oversupply.

Southern and Mountain states have the highest amount of new construction in relation to total inventory, with each region’s pipeline topping 3% of supply. They are followed by the Northeast's 2.7% and the Midwest's 2.4%. In the Pacific, less than 2% of total supply consists of new builds.

Many metros are still working through oversupply from the last build cycle. There were 585,200 units delivered in 2024, a multidecade high. Residents are plentiful, though. Up to 300,000 apartments are expected to be absorbed this year.

Multifamily landlords might finally get a chance to breathe with deliveries slowing and lease renewals growing, as many residents are still priced out of buying a home.

Executives at MAA, AvalonBay and Camden Property Trust cited rent-to-income ratios improving on full-year earnings calls for 2025. That is the silver lining in what is expected to be a costly year for multifamily REITs, many of which kicked off 2026 by signaling lower net operating incomes in the year ahead.

That is on top of declines last year. MAA reported NOI fell 1.4% in 2025, and Equity Residential’s fell 0.9%. AvalonBay saw 1.9% growth, but it was below the 2.4% expectation.

Executives cited a worsening job market and increased economic uncertainty as a drag on profit this year.