Multifamily construction is heating up across the country, according to data from Dodge Data & Analytics. In the first quarter, multifamily starts rose 6% compared with a year ago and were up in all but two of the 50 largest metropolitan statistical areas (MSA). The biggest increases were in cities with strong job growth—Miami and Seattle saw 49% and 36% spikes in multifamily construction respectively. According to Richard Zahn, however, single-family home starts also grew by 11%, indicating that more people are choosing to live in multi-unit homes instead of single-family detached houses.
Multifamily construction was up nationwide in the first quarter, according to Dodge Data & Analytics.
Multifamily construction was up nationwide in the first quarter, according to Dodge Data & Analytics. This is a good sign for the economy, as multifamily housing accounts for about 20 percent of all construction spending.
The increase in multifamily construction comes after an upswing in single-family home building that started last year. Single-family starts increased from 1 million units in early 2016 to 1.2 million at their peak during the summer of 2017 before leveling off at 1.1 million units for both November 2017 and December 2017. Multifamily starts also fell slightly from 538,000 units at their peak during November and December 2016 before rising again over the next two years to reach 618,000 units by June 30th, 2019.
Markets with big spikes in multifamily construction included Miami, where starts were up 49% year-over-year.
While the nation’s multifamily construction market has been on the rise, some markets are experiencing bigger spikes than the rest. In Miami, for example, multifamily starts were up 49% year-over-year in October. The city has been a popular tourist destination for years and is known for its diverse population and young people.
In New York City, multifamily starts rose 38%, while in Los Angeles, they were up 36%.
New York City
Multifamily starts in New York City rose 38%, while in Los Angeles they were up 36%. The trend of more multifamily construction is expected to continue, with the Federal Reserve Bank predicting a 9% increase in rent over the next three years.
Latino communities have been expanding since 2000, and now make up about 50% of all renters in New York City and 25% of LA’s renters. This demographic will continue to grow as millennials age out from living with their parents or roommates and move into apartments with their friends or significant others.
Dallas saw a 33% increase in multifamily starts, while Houston and Seattle both saw increases of 29%.
Multifamily construction starts increased in the top 10 metros by 26% to 2,170 units. Dallas saw a 33% increase in multifamily starts, while Houston and Seattle both saw increases of 29%. Seattle’s increase was the highest of any metro area. Miami was the only top 10 market to see a decrease in multifamily starts (-4%).
More and more people are moving into multi-unit homes from single-family properties.
In recent years, the number of people living in multi-unit homes has increased. In addition to shifting demographics and increasing urbanization, this phenomenon can be attributed to the affordability of these properties. Single-family homes are often out of reach for many Americans who want to buy or rent a home, so they’re turning to apartments and condos as an alternative.
More people are also choosing to live in urban areas over rural ones for a variety of reasons: larger cities offer more job opportunities, higher wages and better amenities than smaller towns do; this trend has been fueled by millennials who prefer city life over suburban living.
Even though the market has slowed down somewhat, there is still a lot of demand for multi-unit housing. The multifamily industry has been growing steadily over the last decade, and it looks like it will continue to do so in the years ahead.