Multifamily Production to Slow Moderately in 2018 & 2019
Orlando, FL, January 11, 2018-Although multifamily housing starts are expected to slightly moderate this year and in 2019, production levels are projected to remain stable in a range considered normal, according to experts participating in a press conference during the National Association of Home Builders (NAHB) International Builders’ Show in Orlando, Florida.
“For the foreseeable future, production of multifamily housing is expected to be running at a trend level where supply is meeting demand,” said NAHB senior economist Michael Neal.
Multifamily starts are expected to edge 2% lower this year to 354,000 units from a projected 360,000 total in 2017 and fall another 3% to 344,000 in 2019.
However, Neal noted this does not indicate weakness in this market segment. “From 1995 through 2005, multifamily starts averaged 335,000,” he said. “Construction activity during the past four years has been running above this trend, and we are seeing the market stabilizing near more normal production levels.”
Ironically, one factor contributing to the stabilization of multifamily activity is the low inventory of homes on the for-sale market. “Fewer homes for sale means that some renter households looking to own will have to rent for longer than they may anticipate,” he said.
Meanwhile, the national rental vacancy rate registered a slight uptick last year, but stands at its low mid-1990s level of 7.5%.