A 2024 ‘construction spree’ will bring 9,000-plus new apartments to Raleigh. Can it last?

Despite higher borrowing costs , the Raleigh metro area continues to see a major uptick in new rental construction.

Some 9,228 new apartments are set to be completed by the end of this year, outpacing major metros like Boston or Los Angeles, according to a new report from the listing service RentCafe.

Out of 369 metros analyzed, Raleigh-Cary ranked 16th for new apartment construction this year. Charlotte, the only other North Carolina metro in the top 20 nationwide, ranked even higher at No. 8, adding 14,658 units. Durham-Chapel Hill ranked No. 53, adding 1,961 units.

Raleigh’s surge comes as the U.S. continues to benefit from a post-pandemic construction boom not seen since the 1970s. Nationally, apartment construction is poised to surpass the 500,000-unit threshold this year, RentCafe found. That’s a new peak, marking a 9% increase compared to 2023 and a 30% rise from 2022.

As the region’s growth surges , Raleigh proper is the top builder with 6,392 units set to open this year, the report found. (Wake Forest and Cary follow at a great distance with 917 and 559 units, respectively.)

That influx includes The Miles , a 204-unit, seven-story building at 10 W. Franklin St. in Seaboard Station on the north edge of downtown, which began leasing in March. Mira Raleigh , a seven-story, 288-unit building at 121 Kindley St., also opened in June.

And deliveries aren’t expected to end soon.

Despite the rising costs of construction materials, labor and land — and the tightening of bank lending standards causing fewer starts in most metros — Raleigh will stay at the forefront “over the next five years,” said RentCafe communication specialist Felicity Domentii.

Nearly 35,000 new units are scheduled for completion by 2028. “That’s 11,174 more units compared to the total of the last five years — the third highest net increase nationwide,” she said.

In downtown Raleigh alone, 17 developments are under construction, according to Downtown Raleigh Alliance’s second-quarter market report .

When completed, projects will deliver 1,811 residential units, 410 hotel rooms and 137,266 square feet of retail space, DRA said. An additional 45 planned and proposed developments would bring 7,381 residential units.

The Durham-Chapel Hill metro is also making gains.

That includes Durham proper (1,296 new apartments) and Chapel Hill (593 new apartments), RentCafe found.

By 2028, it’s projected to deliver an additional 12,044 units, Domentii said. That’s up 3,108 apartments compared to the 8,936 rentals added between 2019 and 2023 — a 35% jump, “the 15th largest increase nationwide,” she said.

The report is exclusively based on apartment data related to buildings containing 50 or more units. RentCafe calculated rent projections using sister company Yardi Matrix ’s estimates, which included confirmed and likely completions for 2024 based on certificates of occupancy.

‘We’re just playing catch-up’

Paul Kane, chief executive of the Home Builders Association of Raleigh-Wake County , said he isn’t surprised by the report’s findings. And the influx of new housing can’t come soon enough.

While inventory is edging up (up 10.7% year-over-year) and the market is starting to normalize, the Triangle is still facing a massive housing shortage . Starting with the 2008 subprime mortgage crisis, builders have been working at a deficit to meet demand, he said.

The Raleigh metro area alone needs at least 17,000 more units, according to a 2023 Zillow study .

Inventory at all price points, from “condos to luxury homes,” is still low, Kane said. “We’re just playing catch-up,” he said, adding that even if much of the new housing is billed as “luxury” with rents starting upwards of $2,000, “it helps.”

“The reality is, today’s luxury apartments become tomorrow’s mid-price and affordable apartments. That’s just the way housing stock works.”

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