Some of the biggest apartment developers and owners are hoping that the expected decline in new units next year might bring some equilibrium to the market and help out their bottom lines.

A 40-year record high of 558,000 units are expected to be added to the market this year across the country while next year a projected 440,000 units will come online.

Supply of new multifamily units has been outpacing demand for the past eight quarters, pushing the national vacancy rate up, according to CoStar Market Analytics.

Mid-America Apartment Communities Inc., the largest U.S. apartment owner with nearly 100,000 units based on data from the National Multifamily Housing Council, said apartment projects coming online are hitting rent growth performance at its properties — and not in a way that's good for the real estate investment trust's bottom line.

However, MAA expects leasing conditions to be supportive of higher rent growth in late 2024 as markets absorb the units in the current development pipeline, said Eric Bolton, the REIT's chairman and CEO, in a third-quarter earnings report.

"Stable employment conditions along with continued positive migration trends to our markets and historically low resident move-outs are combining to drive solid demand," Bolton said.

The national multifamily market is contending with high interest rates that have curtailed new projects but has also kept some potential homebuyers from purchasing a house and staying in an apartment for longer.

MAA, based in greater Memphis, Tennessee, has at least five projects totaling 1,970 apartment units under development in its focused markets in the Mid-Atlantic, Southeast and Southwest regions. The REIT has spent $346.3 million as of the third quarter on the five projects, which have total development costs of $642.7 million, according to the statement.

Three of the developments are expected to be complete in 2024 with the remaining two wrapping up in 2025. MAA bought a 323-unit apartment building in Phoenix for $102 million in October, according to the statement.

Equity Residential, the fifth-largest apartment owner in the U.S. with nearly 80,000 units, made a couple of bets on the Atlanta market while getting rid of a few properties on the West Coast during the third quarter.

The REIT bought a 344-unit apartment property in the Atlanta suburb of Suwanee, Georgia, and a 290-unit multifamily building in Decatur, Georgia.

Equity Residential sold three properties on the West Coast during the quarter, including a 166-unit apartment building in Seattle, and properties in Los Angeles and San Francisco.

Equity Residential’s CEO and president Mark J. Parrell said the REIT's East Coast markets outperformed its West Coast markets. New York, Boston and Washington, D.C., make up more than 40% of the REIT's net operating income.

“Our East Coast portfolio performed very well in the quarter. Strong demand combined with low supply in Boston and New York and rapid absorption of supply in Washington, D.C., position these markets favorably going forward,” Parrell said in a statement.

The San Francisco and Seattle markets underperformed during the quarter because of lower recent job growth in Equity Residential’s target affluent renter demographic, Parrell said.

AvalonBay Communities, the nation's fourth-largest apartment owner with more than 80,000 units, had 17 apartment developments under construction at the end of the third quarter, representing more than $2.2 billion in capital costs.

The REIT's portfolio has mainly been focused on the east and west coasts but said its expansion regions include Texas and Colorado, according to its third-quarter earnings.

In fact, AvalonBay recently picked up two apartment properties in the Dallas area. The REIT bought the 360-unit Avalon Frisco at Main in Frisco, Texas, for $83.1 million from Bell Partners during the third quarter. And in October, AvalonBay acquired the 568-unit Avalon West Plano in Carrollton, Texas, for $142 million, which includes the assumption of a $63 million fixed-rate mortgage loan that matures in May 2029, according to a statement.

AvalonBay also bought the 203-unit Avalon Mooresville in Mooresville, North Carolina, for $52.1 million last month.

The REIT sold Avalon Columbia Pike, a 269-unit apartment building with 27,000 square feet of commercial space in Arlington, Virginia, for $105 million last quarter, representing an economic loss of about $2.4 million, according to regulatory filings. In October, the REIT sold the 229-unit Avalon Mamaroneck in Mamaroneck, New York, for $104 million.