Multifamily housing starts were up in 2018, but production levels are expected to level off in 2019 and stabilize in a range that's considered normal, according to data announced by the National Association of Home Builders (NAHB) at a press conference held during the NAHB International Builders’ Show in Las Vegas this week.
“Multifamily starts will begin to level off through 2019, edging 2% lower this year, at about 379,000 units, approaching the level that was the pre-recession norm,” said Danushka Nanayakkara-Skillington, AVP, forecasting and analysis, for NAHB. “The great majority of 2018’s units were in buildings with 50 or more apartments.”
While a multifamily recovery led housing out of the recession, the single-family market hasn't rebounded as strongly. In addition, the rising cost of land and building materials in 2018 and the contraction in the labor force of skilled subcontractors and other construction workers have pushed the cost of a new single-family home beyond the reach of many young families, many of whom continue to rent.
However, there is growth in single-family rentals, which represented 3.67% of the single-family market in 2015 and 4.25% in 2017. This growth will take a bite out of both the single-family for-sale and multifamily sectors as young families burdened with student debt, finding it difficult to save for a down payment, opt to rent a single-family home.