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Nationally there’s a noteworthy downturn in multifamily construction. In the Hartford area, new data suggests just the opposite.
A new report from Realtor.com, using the Census Bureau’s building permits survey, reported that Greater Hartford municipalities gave building permits to 1,488 units last year, an 89.2 percent increase over the average for the last five years.
Within the 50 biggest U.S. metros, only 294,000 multifamily units were permitted in 2024, Realtor.com said: a 7.5 percent drop from 2020.
And the Hartford area is doing better than its regional competition, too: Greater Boston towns and cites granted 22.3 percent fewer permits fro new housing last year relative to the region’s five-year average; the New York City metro 9.5 percent fewer.
For places like New York and Boston that are seeing big downturns in building, the result is going to be upward pressure on their rents, Realtor.com’s economists said.
“During the pandemic, rent prices surged significantly. While there has been a gradual correction, the current trend of declining rents over the past 19 months and a still-sizable number of multi-family units under construction have impacted builders’ enthusiasm for new projects,” Realtor.com Chief Economist Danielle Hale said in a statement. “The nation is short 3.8 million homes according to Realtor.com research. As builders attempt to right-size their construction pipelines amid shifting economic and policy cross currents, multifamily builders nationwide have made headway, evidenced by vacancy rates trending up. Still, the shortfall varies by market and region. The low level of permitting for multifamily housing, particularly in markets where rents are still climbing, may become a catalyst for future rent growth.”
Even though a lack of permitting could see rents rise, nationally there appears to be a flattening of prices. Rents have grown since 2020 but year-over-year they remained relatively flat. The national median rent currently sits at $1,691, a 0.9 percent decrease year-over-year. In Boston, the median rent rose by 0.7 percent in February to $2,936, while in the New York area Realtor.com pegged that metro’s increase at 6.8 percent, to $2,977 last month.
