Construction starts on new multifamily projects across the Philadelphia metropolitan area experienced a sharp drop-off in recent quarters as interest rate hikes have caught up to the local market. After hitting an unprecedented average of 3,875 units starting construction per quarter in 2022, construction starts fell to 1,100 and 850 units per quarter in the first and second quarters of 2023, respectively. Projects that were unable to secure favorable financing terms are now waiting for rates to decrease, or at least stabilize. This pause will provide existing developments and soon-to-deliver projects with some breathing room during their lease-up over the next two years.
