New rental apartment construction in the United States is expected to top a 50-year high in 2023. According to a report by RentCafe, nearly 461,000 units are expected to be delivered across the U.S. this year, meaning that over the past three years, 1.2 million units will have been built and brought to the market.

According to RentCafe’s analysis of Yardi Matrix data, the number of deliveries is expected to remain high until 2025, at which point the impact of current economic uneasiness will filter through to construction.

The New York metro area leads the country in terms of apartment construction, with 33,000 units to be opened in 2023. Almost one-third of the apartments will be located in Brooklyn (9,825), followed by Queens (4,430) and Manhattan (3,770).

Beyond New York, the Dallas metro area is the second most active, with 23,659 new rental units to come to market. The Dallas metro area has seen the most new apartments opened over the last three years, at 76,660 units. Other strong-performing cities for new apartments in 2023 were Austin (23,434), Miami (20,906), and Atlanta (18,408).

Despite the strong numbers, the compilers of the original data note that slower times lie ahead.

“Tightening of bank lending standards — combined with rising costs of construction materials, labor, and land — has made new projects harder to pencil,” Yardi Matrix business intelligence manager Doug Ressler noted. “Construction debt starts at 8% interest, and most banks only lend 60% or less of the total cost of a project. Junior construction debt is even more expensive, with interest rates in the mid-teens. This financing structure can make it challenging for companies to initiate new construction projects unless they already have a substantial amount of capital on hand.”

The analysis comes days after a separate analysis of nonresidential construction by the Associated Builders and Contractors (ABC) showed a modest rise in the sector last month and a significant 16.5% increase from the previous year.