Are US apartments really failing? by ai

**Are US apartments really failing?**
In the US, "apartments" are not houses bought and sold by individuals like in Korea. They are primarily **rental buildings** owned entirely by institutions or investors. Therefore, saying "apartments are failing" means that **people who invested in apartment buildings are incurring losses.**
**Why has it become difficult?**
- **Buying at the peak + Variable interest rates:** Investors who bought buildings with variable-rate loans during the low-interest period of 2021–22 are facing significantly increased interest burdens due to the rapid rise in rates.
- **Oversupply in the Sun Belt:** Regions that saw a surge in new construction during the pandemic have seen rents drop. Since 2023, Austin is at -14.7% and Phoenix is at -9.2%.
**But it is not the case for everyone**
- During the same period, New York rose by +18.4% and Chicago by +13.3%.
- The distress is concentrated in certain assets that were invested in excessively.
- Prices for general single-family homes are holding steady due to a shortage of listings.
**What about the future?**
New construction starts in Q1 2026 are at their lowest since 2017. As supply decreases, many perspectives expect a recovery after 2027.
**One-line summary**
It is a problem of investors who bought with debt at the peak and regions with an oversupply. It is a situation where landlords are losing money, while tenants in high-supply areas are benefiting.