Despite rising demand, multifamily construction is slowing down

Starts on buildings with five or more units plummeted 17% in July

TRD NEW YORK /
Sep.September 13, 2017 11:10 AM

Multifamily construction

Construction of multifamily buildings is slowing down across the country, even though there’s rising demand for rental units.

More than half of metro areas across the country are expected to see more multifamily housing built this year than what was seen between 1980 and 2016, the Wall Street Journal reported, citing Trulia data. However, that construction — the driver of the last construction boom — is on the cusp of slowing down. If the construction of single-family homes doesn’t increase to fill its place, according to the newspaper, the country’s economy could be adversely affected.

According to Commerce Department data released on Wednesday, overall U.S. housing starts dropped for the fourth time in five months in July. For single-family construction, starts decreased by 0.5 percent. However, they dropped a massive 17 percent for construction on buildings with five or more units.

“I’m optimistic that single-family will catch up,“ Ralph McLaughlin, the chief economist at Trulia. “It’s not going to happen this year and it’s probably not going to happen next year.”

Apartment construction is slowing because of the massive increase in apartment inventory. In New York City, excess supply has led to landlords offering concession to renters and brokers. In July, concessions at residential rental buildings in Brooklyn were the highest they have been in the seven years that they’ve been tracked. [WSJ]Miriam Hall


Related Articles

arrow_forward_ios
Clockwise from top left: 162 West 13th Street, 325 Avenue Y in Brooklyn, 1281 Viele Avenue in the Bronx (Credit: Google Maps)

Here’s what the $10M-$30M NYC investment sales market looked like last week

Real Capital Analytics data showed that New York’s multifamily market had a very slow July. (Credit: iStock)

New NYC rent law “beginning to shut down investment”

Nestio's Caren Maio (Credit: Emily Assiran)

“Like TurboTax”: Nestio launches online leasing

SoFla brokerage execs optimistic, say deals are still closing

SoFla brokerage execs optimistic, say deals are still closing

Angel Oak Cos. CEO Michael Fierman and Flagstar Bancorp Inc. CEO Alessandro DiNello (Credit: Angel Oak, Flagstar, iStock)

Mortgage market dries up for unconventional home loans

US Steel’s sprawling South Works site is about the size of Downtown Chicago. At left, Common, who wants to partner with developers on a mixed-use entertainment district there, and Dan McCaffery, whose vision for a 13,000-home community fizzled out. (Credit: Common by Paras Griffin/Getty Images; McCaffery via McCaffery Interests; aerial by Cushman & Wakefield)

South Works, the 415-acre “magnificent property,” is Chicago’s biggest development opportunity

Bernie Sanders (Credit: Getty Images)

Bernie Sanders throws support behind New York rent-suspension bill

The 30-year fixed rate dropped to 3.5 percent this week (Credit: iStock)

Mortgage rates fall, but who’s buying?

arrow_forward_ios
Loading...