Ongoing economic concerns are impacting both single-family and multifamily construction across the country. According to the National Association of Home Builders, multifamily construction starts are expected to decline by 11% in 2025. However, college towns often exhibit resilience due to the demand for purpose-built student housing. Many universities in the commonwealth are planning to expand both on-campus and off-campus housing to accommodate future increases in student enrollment.

Apartment and condominium construction is widespread in college towns to meet the demand for off-campus housing for students, young professionals, and faculty members. Many residential projects in these areas are mixed-use, integrating housing with office spaces, retail shops, and dining. These developments align with the urban lifestyle preferred by college students and young adults.  

According to the Census Bureau, there has been an increase in building permits for multifamily construction in some college towns in Virginia in 2025. As of January, Fairfax, home to George Mason University, reported 521 multifamily building permits issued. Richmond, which is home to Virginia Commonwealth University, the University of Richmond, and Virginia Union University, reported a total of 748 approved multifamily building permits in January. Meanwhile, Charlottesville has recorded five approved permits for apartment construction so far this year. 

There is still a strong demand for single-family homes and townhouses in Virginia’s college towns. In the Hampton University area, building permits for single-family homes and townhouses saw a remarkable 300% increase compared to January 2024. Similarly, Norfolk, home to Old Dominion University, recorded 15 approved building permits in January, which is an increase of two permits compared to the same time last year. However, the Lynchburg University region experienced a significant decline, with a 41% drop in approved building permits compared to January of the previous year, according to the latest Census data. 

It is evident that Virginia requires additional housing to satisfy the pent-up demand, particularly in college areas. However, changes in America’s economy are leading some builders to feel uncertain about the future of residential construction, as the National Association of Home Builders (NAHB) reported a decline in builder sentiment this month. Builders are also facing upward pressure on construction costs, which could result in fewer homes being built by the end of the year. 

For more information on housing, demographic, and economic trends in Virginia, be sure to check out Virginia REALTORS® other Economic Insights blogs and our Data page.