New Apartment Construction Drops in 2026, But One Region Defies the Trend

Across the nation, apartment construction is dropping sharply in 2026, according to a new RentCafe report.

According to RentCafe, an estimated 442,395 new apartments are expected to open this year — a 27% decline from last year’s 605,768 and the first time in four years that new rentals have fallen below the 10-year average of roughly 466,000.

RentCafe noted that the slowdown isn’t hitting everywhere equally.

In fact, the Northeast is the only region where building activity is actually increasing. The Northeast is experiencing a 20% growth in newly built homes, led by a surge in and around New York City.

Here are the key takeaways from the report:

• About 442,000 new apartments are expected to open in 2026 compared to 606K in 2025, giving renters fewer new options, especially in the South and West where construction is slowing the most.
• Nearly half of all new apartments expected in 2026 are located in the South.
• The Northeast is the only U.S. region where building activity is increasing compared with last year.
• Texas and Florida are set to deliver more new apartments than any other states.
• The New York metro area leads the nation in apartment construction, while Brooklyn will see more new apartments than any other individual location.

The national decline doesn’t necessarily signal weaker demand for rental housing. Instead, the market appears to be moving beyond the exceptionally large post-pandemic construction wave. For renters, fewer new apartments opening could mean a smaller selection in some markets.

According to RentCafe, in areas where a large number of apartments have recently opened, renters will still find numerous new homes to explore. But in markets where construction is slowing, options could tighten heading into 2027, the report noted.

“The outlook for 2026–2027 is shaped by the number of apartments currently being built, which continues to shrink. That means fewer new properties will be completed in both years compared to 2024 and 2025. Our 2026 estimates are a bit lower than previously reported because we’re using newer construction data, not because we’ve changed our overall forecast. Looking ahead, most of the growth in new housing compared to pre-pandemic levels will come from affordable and mixed-income properties,” said Doug Ressler, Senior Analyst & Manager of Business Intelligence, Yardi Matrix.

The South is Largest Source of New Apartments

The South is still the largest source of new apartments, according to RentCafe.

According to RentCafe’s data, the South is expected to account for 47% (208,085 units) of all new apartments opening nationwide in 2026.

RentCafe said it’s worth noting that the region’s steady population and employment growth have helped make it an attractive destination for apartment developers. While construction slows in some of its hottest markets, the South continues to draw development activity because of growing populations, more developable land than many coastal areas, and regulatory environments that make it easier to build.

For renters, that ongoing building activity translates into more apartments to compare, newer amenities, and a wider variety of floor plans and locations to choose from, the report noted.

Texas and Florida lead the region’s apartment construction activity with an estimated 56,394 and 50,392 new units, respectively, RentCafe noted. Together, they account for more than half of the South’s new apartments.

North Carolina and Georgia also rank among the region’s most active states, with 25,109 and 17,323 newly built homes, respectively.

What About the West?

Meanwhile, the West is on track to deliver 101,400 new rentals by the end of 2026, accounting for 23% of all new construction nationwide.

RentCafe said that much of that activity is concentrated in California (38,201), Arizona (19,245) and Washington (12,772). Those states are home to some of the country’s largest rental markets, and high housing costs and growing demand mean new apartments are especially welcome.

Unlike the rest of the country, the Northeast will bring more new rentals to the market than it did last year — specifically, 79,426 new units.

RentCafe said that despite more residents moving to other states than arriving from them, rental demand remains strong enough to support the only year-over-year increase in building activity among the four U.S. regions.

The Northeast is projected to account for nearly 18% of all apartments opening in 2026, RentCafe noted, overtaking the Midwest in its share of national construction activity. RentCafe said that New York and New Jersey stand out as particularly active markets, with 30,171 and 19,289 new apartments, respectively.

The Northeast has historically had fewer apartments come to market due to complex permitting processes, restrictive zoning, and high construction costs. That’s changing: Projects that broke ground during the recent demand surge are now set to open, giving renters in the region more choices than they’ve had in years, RentCafe said.

The Midwest is expected to account for about 12% of new developments nationwide, with 53,484 units scheduled to open, RentCafe said.

New York Market

The New York metro area is building more apartments than any other market.

With 38,825 apartments scheduled to open by December, the New York City metro area is the country’s most-active market for new construction.

The metro is also among the few major markets where apartment construction is increasing, with 11.4% more new apartments expected to open here compared with last year.

In second place, the Dallas metro follows with 20,392 apartments — 45.1% fewer than last year. Here, Fort Worth, Texas, and Dallas proper account for the largest portions with 4,059 and 4,015 apartments, respectively, RentCafe said.

According to RentCafe, the decline reflects the metro’s position in the construction cycle: Dallas-Fort Worth delivered an exceptionally large number of apartments during the recent building boom, and with so many new apartments opening in recent years, renters in the area now have more options to choose from.