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Multifamily Construction Starts Plunge Nearly 36% in January
Multifamily construction starts fell in January to the lowest level since the onset of the pandemic, according to Census Bureau figured released Friday. The 35.6% month-over-month decline for apartment construction drove an overall drop of 14.8%, with single-family starts slipping by a much lower percentage.
TD Bank economist Andrew Foran wrote, “Month-to-month volatility in the multifamily segment is common and a pullback from December’s strong reading, which was revised higher by 75,000 units with this data release, was to be expected. Still, the segment faces headwinds in the form of high financing costs, slowing rent price growth and a build-up of projects under construction from the past few years.”
Lawrence Yun, chief economist with the National Association of Realtors, said in a statement that “rising apartment vacancy is not due to fewer renters but rather due to the oversupply of construction in the past three years. Developers are, therefore, pulling back, at least temporarily.”
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- ◦Development
