Built-for-rent multifamily construction surged at the end of 2025, extending the cycle’s heavy tilt toward rentals and keeping average apartment sizes below pre-Great Recession levels, according to a National Association of Home Builders (NAHB) analysis of Census Bureau data.
NAHB Chief Economist Robert Dietz reported that 96,000 multifamily units started construction in the fourth quarter of 2025. Of those, 91,000 were built for rent, an 18% increase over the fourth quarter of 2024. Rental product accounted for 95% of all multifamily starts in the quarter, one of the highest shares on record.
By comparison, the rental share of multifamily starts averaged about 80% between 1980 and 2002, and it fell to a historic low of 47% in the third quarter of 2005 during the condo boom, NAHB said. Fourth-quarter 2025 condo starts totaled 6,000 units, flat from a year earlier.
Dietz noted that the latest Census figures could be revised lower in future releases, given what other multifamily indicators are showing. But the current data confirm that developers are still overwhelmingly building for rent rather than for-sale product.
“According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts increased year-over-year during the fourth quarter of 2025. For the quarter, 96,000 multifamily residences started construction. Of this total, 91,000 were built-for-rent. This built-for-rent total was 18% higher than in the fourth quarter of 2024,” said Dietz in the NAHB post. “This marks a significant increase, and it is possible these numbers will be revised lower in future Census data given other multifamily data reporting.”
The strong rental bias is holding down unit sizes compared with pre-2008 norms. In the fourth quarter of 2025, the average size of a multifamily unit started to rise to 1,068 square feet, with a median of 1,048 square feet, NAHB reported. Those dimensions are still below the typical apartment sizes seen before the Great Recession and remain consistent with a market geared toward smaller, more affordable rental product.
Why this matters for builders and residential developers
- Product mix: With 95% of multifamily starts going to rentals, the data reinforce that most capital and demand in the multifamily space is chasing income-producing assets rather than for-sale condos. Builders planning attached product may find it easier to pencil deals as rentals than as for-sale projects.
- Condo headwinds: Flat condo starts at just 6,000 units in the quarter underscore how liability exposure, financing constraints and affordability pressures continue to weigh on for-sale multifamily. For developers considering condos, local policy around defect litigation and insurance will remain a key gating item.
- Design and pro forma: Average and median unit sizes just above 1,000 square feet point to continued emphasis on smaller, more efficient layouts that hit price points renters can afford. That has implications for parking ratios, common-area programs and construction cost management on podium and garden projects alike.
- Cyclical risk: Dietz cautioned that Census numbers for Q4 2025 could be revised, which matters for timing new starts in markets already wrestling with elevated multifamily supply. Developers should weigh this against local lease-up velocity and concessions before greenlighting new phases.
For The Builder’s Daily audience, the NAHB data reinforce a key strategic choice: in most markets, the attached pipeline still leans heavily to rentals, and unit sizing reflects that.
Any shift back toward for-sale multifamily will likely require changes in liability regimes, mortgage affordability or both.
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