Multi-family apartment buildings are rising across the country at the fastest pace in 50 years, according to a new report from RentCafe. The real estate listing service projects that the U.S. will build 420,000 new rental units in 2022, which would be the most since 1972. The apartment boom is also taking place despite the broader U.S. housing market hitting a rough patch. 

Since the Federal Reserve started raising its benchmark interest rate earlier this year, mortgage rates have doubled, which has slammed the brakes on a nationwide construction spree. Recent federal data shows month-over-month declines in construction spending, housing starts, and building permits. Just last week, the National Association of Home Builders said the industry was in a recession. 

It turns out that's not the case for multi-family construction. The same industry group said that the number of apartments with five or more units currently under construction is up 24.8 percent year-over-year. In part, the uptick is related to the tight market for single-family homes. 

"This construction boom is driven by pent-up demand for apartments nationwide, especially as some renters postpone their dream to become homeowners amid soaring inflation and rising interest rates," said the RentCafe report, which was compiled based on data from research firm Yardi Matrix. 

The report also found that New York City, despite its population falling 1.6 percent or roughly 328,000 people in 2021, is leading the pack in multi-family construction. The city is set to add 28,153 new apartments this year, which is almost double the amount that had been built in 2021. 

This is notable because the geography of housing demand shuffled during the pandemic. Cities such as Austin, Dallas, and Miami became hotbeds for new construction, while the Big Apple languished in the aftermath of a devastating COVID outbreak that sent many residents packing. 

"That’s a remarkable comeback for a metro that has been bleeding residents as a direct consequence of the pandemic and subsequent restrictions," said the report. 

Considering their relatively smaller sizes, however, those other cities continue to churn out new apartments at a rapid pace. In a close second, Dallas is set to build 23,571 apartments this year — though this would mark a 10 percent drop from 2021 — and in third place, Miami, which Rent Cafe said has the hottest rental market in the country, is set to add 19,125 apartments in 2022. 

Of course, multi-family construction isn't entirely immune to the headwinds buffeting the industry. 

“The construction industry is finally returning to pre-pandemic levels of activity but is still being hampered by three familiar challenges: labor shortages; material costs and availability; and supply chain issues," said Doug Ressler, manager of business intelligence at Yardi Matrix, in the report.