Heat pumps cross 50% of new US apartment buildings for the first time in 2025

Heat pumps were installed in 53% of new apartment buildings completed in the United States in 2025, up from 46% in 2024 - the first time multifamily construction has crossed the majority threshold, according to US Census Bureau data^[1]. The shift marks a structural change in how the country's residential building stock is being heated, driven by technology economics as much as policy.

What the Census data show

The 53% apartment figure is the headline, but the broader picture is consistent^[1]. New single-family homes, including row houses and town houses, reached 48% heat pump penetration in 2025, up from 45% in 2024. Taken together, 78% of new apartment units and 56% of new houses built in 2025 had electric heating in some form - either heat pumps or the less-efficient electric-resistance systems they are increasingly displacing.

The regional split remains wide. In the South, 96% of new apartments are electrically heated; in the Northeast, the share is 52%^[1]. Warmer climates have long favored heat pumps because the technology's efficiency advantage over gas narrows in sustained cold, and because mild winters reduce the engineering complexity of sizing a system. The Northeast's gas-heavy building stock and existing pipeline infrastructure have historically made the economics less compelling for developers.

Why developers are choosing electric

The trend has persisted across federal administrations and is not primarily a policy artifact^[1]. Two forces stand out.

First, technology improvement. Modern cold-climate heat pumps maintain output at temperatures well below freezing, eroding the performance gap that once made gas the default in northern markets.

Second, construction economics. Every building requires electrical infrastructure; gas connection is an additional cost layer. One New Mexico developer cited savings of $3,000 per lot by skipping gas-line construction - a figure that scales to roughly $13.5 million across a 4,500-lot development^[1]. In 2025, gas bills rose 60% faster than electric bills and four times faster than the rate of inflation, according to the Building Decarbonization Coalition, reinforcing the operating-cost case for all-electric buildings.

A federal tax credit expanded under the 2022 Inflation Reduction Act - offering developers up to $5,000 per energy-efficient housing unit - also supported adoption^[1]. That incentive has since been eliminated by Congress, but the underlying economics remain intact.

The shipment picture

New-construction data align with the broader sales trend. Heat pump shipments in the US have more than doubled over 15 years, rising from 1.8 million units in 2010 to 3.64 million in 2025. In Q1 2026, heat pump shipments surpassed gas and other fossil-fuel furnace sales by 32%, and the gap between heat pump and air-conditioner shipments hit its smallest first-quarter margin on record, according to the Air-Conditioning, Heating, and Refrigeration Institute. Heat pumps have outsold gas furnaces for four consecutive years.

What to watch

The expiry of the IRA new-construction tax credit removes one tailwind, but the developer cost argument for all-electric construction does not depend on it. The more consequential variable is whether cold-climate adoption accelerates in the Northeast and Midwest, where gas infrastructure is dense and the economics are tightest. State-level policies - building codes, gas line-extension subsidy reform, and utility rate design for heat pump owners - will determine how quickly the national average moves beyond the 53% threshold now set by multifamily construction.