While construction of new apartment buildings has exploded in the Rocket City in recent years, that growth is slowing – which means renters are likely to see rising housing costs.

“It really gets down to supply and demand,” said David Wilson, director of mixed-use assets for real estate development firm RCP Companies. “Right now, it’s still a very competitive time in the market, and there are a lot of properties that are still in their initial lease-up period.”

A lease-up period is the time when a new or recently renovated property hits the market and tries to fill up with new tenants until it reaches stabilization; a property is generally considered stable when at least 90% of its units are occupied. To attract new tenants so they can fill the building and generate reliable income from rent payments, property management companies often offer incentives, such as reduced or free rent for a certain period of time.

Prospective tenants may want to sign their leases soon if they hope to capitalize on those incentives in Huntsville. Because the number of new apartments being built and delivered locally isn’t as high as it was a couple of years ago – and therefore there’s less competition – Wilson believes that Huntsville renters can expect to see less robust offers from apartment buildings looking to attract new tenants and occupy units in the near future.

“With the strong demand that we’re having in the market, there’s a lot more demand than there are units being delivered. So that supply and demand equation results in occupancies rising,” he said. “And as occupancies rise, the rental rates will start to increase. And we’re already starting to see that. The operators of the properties, the owners, the managers and so forth, will begin to pare back the concessions. So instead of offering three months free, they’ll offer two months free, and then eventually they’ll go to one month free.”

Leasing incentives, including several weeks of free rent, have been common as Huntsville’s apartment market absorbs a wave of new units. Photo: Kara Coleman Fields

The Huntsville Business Journal requested data from the City of Huntsville about how many apartments have been built in the city limits during the past few years. According to this data, 2024 saw a massive explosion of new apartments. The city issued certificates of occupancy for 5,211 individual apartment units that year, continuing an upward trajectory from 3,451 in 2023 and 2,545 in 2022. However, after 2024’s peak, Huntsville issued COs for 3,737 apartment units in 2025. As of Aug. 31, the 2026 number is 802 units.

Huntsville has certainly seen a population surge in recent years; in July 2025, the city estimated that 249,102 people called the Rocket City home – nearly a 16% increase since the 2020 census. And according to an email from Kelly Schrimsher, director of communication for the city, single-family home growth has remained steady during the apartment boom. So what exactly drove the wave of new apartment construction?

“We had a massive supply wave that got triggered by extremely low interest rates, a very tight housing market – we were undersupplied for a couple of years. It was very difficult to buy a house,” Wilson said. “Occupancies for apartments were 97, 98%-plus. Rent growth was occurring at a national record-setting pace of 7 or 8% a year consistently, year after year. That was just rocket fuel on the multi-family market here. So that attracted lots of developers.”

This phenomenon wasn’t unique to Huntsville. According to the research organization Urban Institute, the U.S. added more multi-family housing between 2021 and 2025 than any other span of time in more than 30 years. But the higher-than-normal increase in new housing, coupled with Huntsville’s rapid population growth, meant noticeable changes happened in a short amount of time here.

“We had a temporary oversupply added, and we’re working our way out of it,” Wilson said. He predicts Huntsville will see a “normal, balanced market” by mid 2027.

“We’ll have very few new apartments coming to the market, which is great news,” he added. “So I think we’ll have strong demand, a limited supply, and that will trigger strong rent growth. So rental rates will be rising, I think, pretty rapidly. And the specials and concessions will start to decline.”

While the prospect of missing out on promotions isn’t necessarily good news for tenants, these rent specials aren’t the only reason people choose to live where they do; location and personal recommendations still carry weight. Jonathan Maahs said the apartment complex off Airport Road where he rents was recommended to him by a coworker. Sara Beth Barnett, who rents an apartment downtown, said she was drawn to the walkable neighborhood when she moved there from Madison in 2020.

“It’s still very walkable, and they keep adding more restaurants and businesses. So really during the weekends, I rarely ever get in my car. It’s really nice,” Barnett said.

Schrimsher, the director of communication for Huntsville, wrote in an email that the city expects apartment development will return to normal levels over the next few years – at least for a while.

“Huntsville experienced a similar boom in apartments in the mid-1980s, and for the next 30 years the City averaged between 2-3 new complexes per year,” she wrote. “Given that Huntsville is in much better shape economically now than it was in the 80s, we probably won’t have to wait another 30 years for the next housing boom to happen.”