Fastest Growing Markets for Multifamily Development 2022

The multifamily housing development market bounced back strongly after the economic uncertainty of 2020. According to Dodge Data & Analytics, multifamily housing starts grew 19% in 2021. A further 5% increase is expected in 2022 as demand for Class A buildings and living experiences continue to outnumber supply.

To best leverage the opportunity afforded by the housing demand, we collected data from Costar to determine the 5 fastest growing markets for multifamily development in 2022. These markets had the greatest percentage increase of units under construction from 2020 to 2021, the biggest year-over-year growth in construction starts by unit, and the most estimated units to be delivered in 2022. Rate of population and job growth were also taken into consideration, along with occupancy rates and their future projections. 

Hottest Multifamily Markets 2022

5. Nashville, TN

Just under 60,000 multifamily units were under construction in Nashville in 2021, which is a 211% increase from 2020. The region is estimated to deliver approximately 9,000 units in 2022. Nashville has also seen a steady population growth year over year with current data showing a low average vacancy rate and high 12-month rent growth of 6.6% and 10.1%, respectively.  

Recent proposals from the Biden Administration regarding limitations to profits that can be deferred through a 1031 exchange have encouraged cautious investors to trade assets. CBRE multifamily broker Russ Oldham  commented, “Families and individuals who have owned for 20-30 years and weren’t seriously considering selling have sold in gateway markets and rolled their cash into Nashville investment properties this year.”

4. Atlanta, GA

Atlanta has seen the largest jump in units under construction from 2020 to 2021. Costar reported 74,988 units under construction in 2021, a 324% increase from the previous year. The area is also estimated to deliver 12,900 units in 2022. Despite the aggressive additions to supply, Atlanta saw a basis point increase in occupancy for stabilized properties as well as hitting record low vacancy rates over a 12 month period. 

While still a secondary market, Atlanta is home to the busiest airport in the U.S. and has the highest concentration of colleges and universities in the Southeast. The strong business market in Atlanta will continue to attract and retain young, affluent professionals, especially considering the market’s resiliency throughout the pandemic. It was one of the first states to reopen businesses and currently has a record-low unemployment rate of 2.4%. 

Cristina Istrate, Asset Management Associate at FCP, stated, “Atlanta will continue to be one of the strongest multifamily markets in 2022, with continued capital inflows generating robust sales and financing activity. We will continue to see strong demand for apartments as well as high levels of rent growth, which will fuel high property values and keep cap rates low.”

3. Austin, TX

In the past year, Austin has doubled its construction starts by unit and is estimated to deliver 15,827 units in 2022. The thriving tech industry continues to draw attraction to the market, and supply never seems to be able to meet demand. This is reflected in a record 25%+ rent growth and strong occupancy rates at the end of 2021 compared to the previous period. 2022 is projected to report a 10% additional increase in rental pricing by the end of the year.  

“Nearly every developer we speak with has shared that his or her company is executing more than 50 or 60 leases per month and can’t seem to deliver units quickly enough to keep up with demand,” said Andrew Dickson, Managing Director at Newark. “The previous high-water mark for annual multifamily absorption in Austin was just over 11,200 units; 2021 absorption is trending toward over 15,500 units.”

2. Phoenix, AZ

Phoenix continues to rank among the top multifamily markets for rent growth as demand continues to outnumber supply. Units under construction jumped from 44,788 in 2020 to 104,444 in 2021. The market reflected a 33% increase in construction starts by unit during that time as Phoenix continues to try and meet demand as occupancy rates climb for stabilized properties over 12 month periods at an average of approximately 100 basis points. By the end of 2022, there are 18,025 units estimated to be delivered. 

Job opportunity and affordability are key drivers of multifamily growth. In July, Chapin Bell, CEO of P.B. Bell told Globe St., “There are a number of large companies coming to Phoenix to expand their businesses which brings an influx of job opportunities to the city so more individuals are flocking to the area. We are [also] seeing a lot of people moving here from states like California to get away from the high cost of living. Overall, the multifamily industry is experiencing so much success because it is riding on the coattails of the Arizona economy.”

1. Dallas, TX

With an estimated 24,188 units to be delivered in 2022, it is no surprise that Dallas is our projection for the fastest growing market in multifamily development. The region jumped from 41,303 units under construction in 2020 to 109,339 units under construction in 2021 – a 165% increase. Dallas also added 6,563 more units to the overall construction starts in the region from the previous year. 

In Q3 2021, net absorption doubled from Q3 2020 and increased 23.5% from the previous quarter. Dallas also hit a record high occupancy of 96.6%, which was up 110 basis points from the previous quarter. 


“The Dallas multifamily market has been hot for the last seven years, and this year it’s boiling over,” commented Jon Krebbs, managing director, The Multifamily Group in September.  “Oftentimes sellers are receiving multiple offers within hours after going on the market from buyers trying to preempt the marketing process. As a result of high buyer demand and historically low interest rates, multifamily cap rates in DFW are the lowest they have ever been.”

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