Why the Apartment Construction Slowdown Is a Major Win for Passive Investors

Introduction

Apartment construction activity in the U.S. has just hit its lowest point in a decade, according to a new report from GlobeSt. With just 60,000 units breaking ground in Q2 2025—a 35% year-over-year drop—the slowdown is no longer speculation.

For many, this might sound like a red flag. But for investors in existing multifamily real estate, this trend could represent one of the most strategic tailwinds we’ve seen in years.

Here’s why.

The Data: A Sharp Pullback in New Construction

The GlobeSt article highlights several key points:

➤ Only 60,000 units started construction in Q2—the lowest quarterly total in 10 years
➤ That figure is down 35% compared to Q2 2024
➤ Markets that saw the biggest construction boom in 2022–2023 are now leading the slowdown, including Phoenix, Austin, Dallas, and Miami

The reason? A perfect storm of:

✅ High interest rates
✅ Skyrocketing construction costs
✅ Cautious lenders
✅ Flat or declining short-term rent growth in overbuilt submarkets

Developers are pausing. Financing is tight. And the pipeline of future units is shrinking fast.

Why That’s Good News for Apartment Investors

Fewer new buildings means fewer options for renters—especially in the Class A space, where most new developments have been focused.

That sets up a favorable environment for existing communities, particularly in:

➤ Class B & C properties with upgraded finishes
➤ Workforce housing
➤ Properties acquired below replacement cost
➤ Assets offering renovated units at a discount to new construction rents

With new supply thinning out in 2025 and likely 2026, rental demand will consolidate around available, well-located properties—driving up occupancy and pricing power for owners.

Strategic Timing: How Faris Capital Partners Is Responding

This is the window Faris Capital Partners was built for.

We focus on acquiring well-located, underperforming assets in landlord-friendly markets like Florida, Georgia, and the Carolinas—then quickly repositioning them through:

➤ Strategic renovations
➤ Better property management
➤ Resident-first community upgrades

With fewer new apartments entering the market, we’re seeing:

✅ Faster lease-ups
✅ Better renewal rates
✅ Higher rent growth, even in softening metros

And that’s exactly why we’re launching two new investment opportunities this quarter.

The Bottom Line: Scarcity Creates Strength

In real estate, supply shocks create pricing power—especially when paired with strong demographic demand.

With construction at a 10-year low, the next few years could be defined by tight rental supply, especially in secondary and tertiary markets where institutional developers have pulled back.

If you want to invest in this moment—and capitalize on high-cash-flowing deals with long-term upside—we’re ready to talk.

👉 Click here to reserve your priority access to our newest deals before they open to our full list.

We’ll show you the exact locations, business plans, and financials—no pressure, just full transparency.

Final Thought

The best investors don’t wait for the headlines to tell them it’s time. They act when the data points to opportunity.

The construction slowdown isn’t a warning. It’s an opening.

Let’s move through it together.