Multi-family sector unlikely to suffer from recovery

TRD New York /
Aug.August 27, 2012 03:00 PM

The housing market generally appears to be recovering, but CNBC said it’s not necessarily happening at the expense of the multi-family sector, which boomed as home sales and home prices plummeted.

The latest data shows home sales are rising yet prices for those homes remain flat. Simultaneously, rents continue to rise and push affordability back in favor of buying, CNBC said. Additionally, with multi-family construction up 30 percent annually in July and permits for such buildings 47 percent greater, an oversupply could be on the horizon. 

Still, because of the strict lending standards and several important cultural shifts, many housing experts told CNBC they don’t foresee the bottom falling out of the multi-family sector.

“For the first time since World War II, the United States is experiencing increased levels of urbanization,” Eric Bloom, a senior research analyst at Pike, told CNBC. “By 2021, over one-fourth of the residential stock of the United States will be in multi-unit residential buildings.”

That high demand is keeping the fundamentals for the multi-family sector strong, according to Chandan Economics founder Sam Chandan. Though the forthcoming supply may level off growth — and that has slowed investors’ interest in multi-family of late, even in New York City — it won’t deliver a big blow unless housing begins booming again. [CNBC] — Adam Fusfeld


Related Articles

arrow_forward_ios
(iStock)

Pandemic slammed brakes on nearly half of would-be homebuyers: Survey

Pandemic slammed brakes on nearly half of would-be homebuyers: Survey
The final week of June saw the average loan size hit $360,300, a record high in the history of MBA’s purchase index (iStock)

Size of home purchase loans hits record high

Size of home purchase loans hits record high
(iStock)

Home loans are getting bigger, even as application volume drops

Home loans are getting bigger, even as application volume drops
(iStock)

Party’s over? Applications for homes loans fall

Party’s over? Applications for homes loans fall
Housing construction hasn’t recovered to pre-pandemic levels yet, but more permits were issued last month than expected. (Credit: iStock)

Housing starts are still low, but jump in permits suggest builders are planning

Housing starts are still low, but jump in permits suggest builders are planning
Mortgage Banker Association’s weekly index shows another increase in purchase applications for home loans during the second week of June 2020 (iStock)

Mortgage applications to buy homes hit 11-year high

Mortgage applications to buy homes hit 11-year high
The pandemic has brought a silver lining for Lennar

The pandemic has brought a silver lining for Lennar

The pandemic has brought a silver lining for Lennar
Federal Reserve Chairman Jerome Powell (Getty, iStock)

Real estate stocks outperform broader market but still sink

Real estate stocks outperform broader market but still sink
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...