U.S. Apartment & Condo Construction Market to Reach $124.2 Billion by 2032 Amid Surge in Rental Demand

(MENAFN- P&S Intelligence) According to the latest market research study published by P&S Intelligence, the U.S. apartment and condominium construction market is witnessing a remarkable surge, with its value reaching USD 91.1 billion in 2024 and projected to hit USD 124.2 billion by 2032, growing at a steady CAGR of 4.1% from 2025 to 2032. This expansion is primarily fueled by stabilizing inflation, reduced interest rates, and a rising appetite for housing in bustling urban and suburban centers like New York, Dallas, and Austin.

2024 marked a record-breaking year, with developers completing over 500,000 rental units. This surge led to 666,000 units being sold or leased—an impressive 450,000-unit increase year-over-year. The occupancy rate remained robust at 94.8%, even as rental prices softened due to the influx of new properties. Developers are increasingly embracing sustainable materials, digital management tools, and energy-efficient systems to meet modern expectations and secure green certifications, making them more competitive and attractive to tenants.

Key Insights
• Low-rise and garden-style apartments lead the market with a 45% share, particularly flourishing in suburban and exurban areas where land availability and lower costs make them a practical choice for families.
• High-rise buildings, with 10+ floors, are the fastest-growing category, driven by increasing demand in densely populated urban areas.
• New construction holds the lion’s share of 75%, driven by population growth and infrastructure development, with cities rapidly expanding and government-backed housing initiatives gaining momentum.
• Sustainable and smart housing is the fastest-growing construction type as developers aim for greener, tech-integrated buildings that appeal to environmentally conscious tenants.
• Mid-range housing dominates the market at 55%, offering affordability and comfort to middle-income families, professional renters, and first-time buyers.
• Affordable & workforce housing is the fastest-growing price category, reflecting increased demand among cost-sensitive renters amid rising home prices.
• Rental apartments account for a commanding 80% market share, supported by strong urban migration trends, short-term living preferences, and a vibrant rental culture.
• Senior living and assisted housing is the fastest-growing end-user segment, spurred by aging demographics and the need for dedicated residential solutions.
• The South leads regional revenue generation with a 45% share, supported by 359,000 unit completions in 2024, particularly in Sunbelt metros such as Dallas, Miami, and Houston.
• The West is the fastest-growing regional market, driven by rising populations, economic growth, and heightened rental demand.
• Smart building technologies, including IoT-enabled security, smart thermostats, and automated lighting, are gaining traction, helping reduce utility consumption by up to 20%.
• Regulatory standards such as the National Green Building Standard (NGBS) and LEED certification requirements are pushing developers toward eco-conscious construction practices.
• Lower federal funds rates—reduced to 4.25–4.5% in April 2025—have made construction financing more feasible, stimulating project launches.
• Gen Z and millennials are favoring rentals over ownership, driven by flexibility, high home prices, and lifestyle preferences.
• Mixed-use developments are on the rise, allowing developers to maximize returns through a blend of residential, commercial, and recreational facilities.
• Major players include Crow Holdings, Related Companies, Greystar Real Estate Partners, AvalonBay Communities, Camden Property Trust, and more, actively shaping the market landscape with diverse project portfolios.
• In recent developments, Crow Holdings Capital secured USD 3.1 billion for its U.S. Diversified Value-Add Real Estate Fund, and Bozzuto Construction launched the Avonlea Affordable Senior Housing project in Virginia.

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