Homes and apartments in the United States could soon become more affordable as more than 500,000 rental units are expected to flood the market by the end of this year.
Developers in the US are currently on track to complete 518,108 apartment units by the end of 2024, according to a report from RentCafe. That marks a 9% increase in completed apartment units from last year and a whopping 30% from 2022. Furthermore, it is also the first year in US history where the number of completions in apartment units will surpass the 500,000-unit threshold.
The report also noted that they expect at least two million apartments to be completed by 2028.
How Can It Affect US Housing Affordability
An influx in the supply of apartment units in the US can help moderate rent-price increases, which are already showing signs of slowing down, excluding New York City.
Read also: New York City's Rent Has Increased So Much That Even Workers Making $135,000 Can't Afford It: Report
In addition, the completion of the rental units will likely bring home prices down, giving potential buyers relief. With more apartments available, landlords will be forced to lower their rents to stay competitive. This, in turn, would increase the appeal of renting, which could reduce the homebuying competition and push home prices lower.
For perspective, the median sale price of a typical US home was $434,050 as of August, per data from Redfin. That was 3.2% higher year-over-year.
"People look at continuing to rent versus buying and say, 'Well, wait a second. Renting is awfully attractive. I'm going to hold off on that purchase,' which softens demand on the purchase side," Housing Finance Policy Center's founder Laruei Goodman told Business Insider.
Where Will Apartment Units Increase the Most
New York City will see the most completed rental units of all metropolitan areas in the US. At least 32,935 apartments are set to come online by the end of this year. The Big Apple is leading the charge for the third consecutive year.
Dallas follows closely behind, with 32,932 rental units set to come online this year.
