Seattle area's apartment pipeline is drying up

The Seattle area faces a significant decline in apartment project approvals, with a more than 50% drop in permits from April 2024 to March 2025. Developers received permits for only 21. 2 multifamily units per 10,000 residents, down from an average of 42. 6 units during the same months from 2020 to 2023. This decline raises concerns about potential rent hikes as fewer new units become available.

Daryl Fairweather from Redfin warns that rising construction costs and a recent slowdown in tech hiring contribute to the downturn in demand for new apartments. Currently, fewer than 15,000 market-rate units are under construction, a stark decrease from about 30,000 units in 2023. Seattle city officials have made efforts to expedite the permitting process, but the Master Builders Association argues for further reforms to enhance affordability. High mortgage rates are also keeping more people in the rental market, which could lead to increased competition for available units. Fairweather predicts that the current lull in rent growth may not last long as these factors converge.