US apartment buildings have tipped toward heat pumps

Heat pumps are a key way to get fossil fuels out of buildings — and the tech recently notched a win in the U.S. housing market.

2025 marked the first year that over half the apartment buildings constructed nationwide came equipped with the überefficient electric appliances, according to U.S. Census Bureau data. Buildings with heat pumps, which can both heat and cool indoor spaces, accounted for 53% of new apartment complexes, up from 46% in 2024.

New houses, including row houses and town houses, aren’t far behind: In 2025, 48% were built with heat pumps, up from 45% in 2024.

The stats are the latest evidence that heat pumps are taking over the U.S. residential heating market. For the past four years, these devices have outsold conventional gas-fueled furnaces, which belch pollution that endangers health and warms the planet. The tech’s growing popularity is a positive sign for decarbonization, since burning fossil fuels in buildings contributes nearly a tenth of the nation’s total greenhouse gas emissions.

The data reveals another piece of good news: The majority of all homes built last year — 78% of new apartment units and 56% of new houses — had electric heating in some form, either heat pumps or less-efficient electric-resistance systems. 

This trend toward electric heating has persisted for over two decades now, across federal administrations, though it varies regionally. For example, in the South, with its milder winters, 96% of new apartments are electrically heated; in the Northeast, it’s just 52%.

Driving the shift to heat pumps is likely a combination of factors, according to Alan Durning, executive director of the Sightline Institute, a sustainability nonprofit in the Northwest. The two that stand out, he said, are improvements to the technology and the increased demand for air conditioning during climate change–fueled heat waves. While heat pumps are pricier up front than gas furnaces, they can be competitive with a gas furnace plus central AC. 

A federal tax credit expanded under the 2022 Inflation Reduction Act could have also spurred heat-pump installations. That incentive offered developers up to $5,000 per energy-efficient housing unit. But even though the credit expired last month after being axed by President Donald Trump and Republicans in Congress, developers still stand to profit by ditching gas in new buildings.

All buildings require electrical infrastructure. But hooking up to a gas pipeline on top of that adds complexity, time, and expense. New Mexico land developer John Moscato says that by skipping gas-line construction, his company reduces costs by $3,000 per lot. That adds up fast.

“In our upcoming development of 4,500 lots, we expect the savings of being all-electric to be approximately $13.5 million,” Moscato said.

Some states, like California, Colorado, and Washington, have standards that encourage new construction to go fully electric. But ​“red states are never going to pass laws requiring a phaseout of gas in new buildings,” Durning said. 

Still, he said, policies that simply boost new housing in such states can move the needle toward cleaner buildings, since developers are increasingly likely to opt for electric heating appliances. And unlike gas bans, these laws are politically palatable, he added, pointing to recent pro-housing zoning reforms passed in deep-red Montana and Idaho. ​“We are getting accidental electrification,” he said.

Some legislators may ​“say climate change is a hoax, but they want to free the market in their cities to build more housing,” Durning said. ​“In red states, building more apartments will move us closer to decarbonization.”