The housing starts number that the Census Bureau reported earlier this week was pretty much what you’d expect in today’s higher-interest-rate environment: The number of housing projects that began construction was down 11% from July to August.

The same report also includes the number of housing projects that were completed and the trend there is in the opposite direction, especially for buildings with five or more units. Those were up by nearly half month-on-month, and a third year-over-year.

All of those new apartment units could help keep rent inflation under control, but they’re not gonna fix the country’s housing shortage.

Every time Eric Farrell has built a new apartment building in Burlington, Vermont over the last few years, the units have been snapped up fast.

“We post a unit for rent and it’s gone within — sometimes same-day, certainly within a few days,” he said.

Demand has pushed Farrell and other developers to build more rental complexes.

But they take years to complete, said Caitlin Sugrue Walter, Vice President of Research at the National Multifamily Housing Council. And there was that… big public health issue that threw everything off a few years back.

“Some of these completions are surely things that were delayed during the pandemic,” she said.

All this new supply is bringing down the cost of housing in some places, said Lisa Sturtevant, chief economist at Bright MLS.

“We’re seeing owners of apartment buildings giving concessions, a couple of months free rent, free parking,” she said.

So, that’s great. But demand isn’t going away, in part because of what’s going on in the home ownership market, said Danushka Nanayakkara with the National Association of Home Builders.

“We have a large cohort of millennials that are in what we would traditionally say are ‘peak homebuying years,’ but we don’t have enough housing inventory for them,” she said.

Couple that with high mortgage rates, and a lot of millennials are stuck in rentals, driving up demand. 

And while lots more apartments are opening now, that trend might not last. Caitlin Sugrue Walter at the NMHC said the number of apartment projects getting started is way down.

“We’re looking at a very complicated financing situation right now with interest rates where they are,” she said.

That’s true for Eric Farrell in Vermont. Right now, his company is building a complex he expects to finish next summer. After that, he hopes to build another one. But when is anyone’s guess.

“Can we start it next summer when we’re done with the current building? Or are we going to have to, you know, sit tight for a year or two?” said Farrell. “It just depends on what goes on in the world.”

Mostly, he said, the world of interest rates and construction costs is what counts.