AUSTIN, Texas — A new report from Realtor.com has thrown a stark light on what could be a worrying trend for renters across the nation. With a significant decrease in multifamily housing permits, Americans are potentially looking at a surge in rent that could hit the wallets of millions.

According to the report, the number of multifamily units permitted in 2024 dropped to 294,000, well below the numbers during the peak of COVID-19, with 318,000 in 2020. The lack of new permits is hitting hardest in New York, Kansas City, and Detroit—cities already witnessing skyrocketing rent hikes.

Danielle Hale, Chief Economist at Realtor.com, in a statement, said, “During the pandemic, rent prices surged significantly. While there has been a gradual correction, the current trend of declining rents over the past 19 months and a still-sizable number of multi-family units under construction have impacted builders’ enthusiasm for new projects.” She continues, “The nation is short 3.8 million homes. As builders attempt to right-size their construction pipelines amid shifting economic and policy cross currents, multifamily builders nationwide have made headway, evidenced by vacancy rates trending up. Still, the shortfall varies by market and region.”

The report spells out serious concerns for residents in several major metros including New York, Kansas City, Detroit, Washington D.C., San Jose, Baltimore, Boston, St. Louis, and Charlotte. Each of these cities has seen lower-than-average multifamily housing permits in 2024, a sure sign that rent increases could be on the horizon.

In Ohio, the state continues to see a rise in homelessness as housing options become more scarce for low-income families.

One interesting angle that emerges from the data is the apparent stability in rental markets within major federal employment hubs like Washington D.C. Despite high concentrations of federally employed workers, significant impacts from federal layoffs on rent prices haven’t materialized… yet. The question remains: will this trend hold?

Experts say there has been a shift towards larger rental units. Two-bedroom units have seen the most growth over the last five years, at 18.3%.

As new housing developments lag, rent prices are poised to jump, setting up a scenario that demands responsive policy measures.