America is delivering more apartments than any time in the last 40 years—yet rents remain stubbornly high. This contradiction frustrates policymakers, confuses renters, and alarms investors.
But the truth is simple: we are building the wrong units in the wrong places at the wrong price points.
Record Supply — But Misallocated
More than half a million new units hit the market in 2024–2025, but most are luxury Class A developments.
Neal's Take:
“We’re not oversupplied. We’re incorrectly supplied.”
Middle-Income Renters Are the Most Underserved
Developers can’t build Class B at sustainable margins due to inflated land and construction costs.
Neal's Take:
“The affordability crisis isn’t a demand problem—it’s a construction cost problem.”
Household Formation Outpaces Deliveries
Millennials and Gen Z are entering peak family formation years. This keeps demand high despite new supply.
Neal's Take:
“Demographics always win. And right now, demographics are screaming for more rentals.”
Migration Is Reshaping Rent Floors
Markets like Austin, Charlotte, Phoenix, Nashville, and Columbus continue absorbing new inventory quickly.
Neal's Take:
“Apartment demand isn’t national—it’s hyperlocal. Oversupply in one city means nothing to the next.”
Rents Will Rebound Faster Than Expected
Temporary softening will fade by late 2025, especially in high-growth metros.
Neal's Take:
“When the supply wave passes, rents surge. The moment the pipeline shrinks, pricing power returns.”
Investors Should Use This Window Strategically
Periods of temporary price softness are ideal acquisition windows—especially with strong demographic support.