The Commerce Department data released on August 19 suggests that, looking at a rolling 12-month total of multifamily starts without any seasonal adjustment, construction has hit its highest level since 1989 for the year ending in July.
This is less significant for economic growth than single-family homes, which have a bigger multiplier effect on both consumer spending and job growth, the Wall Street Journal reports.
“We will take what economic activity we can get, but our housing market model was designed in the U.S. to build a lot of single-family homes for owners, not multifamily homes for renters,” Diane Swonk, chief economist of Mesirow Financial, wrote Tuesday on the company's blog.
The boost to apartment construction, however, suggests that job gains are encouraging the creation of households, and that consumers' needs will require more construction, both for renters or for owners.
Renting has become popular, at least in part, because many Americans cannot afford the down payment for a house or can't get a mortgage, and others prefer the flexibility that comes with a lease.
Soon, however, rising rents could encourage renters to buy homes. A Labor Department report notes that rents were rising at their fastest pace in five years this July, up 3.3% from last year.
With apartment construction hitting a 25-year high, it's not surprising that apartment company stocks have been doing well. Shares of Equity Residential (EQR -0.13%) and AvalonBay Communities (AVB +0.22%) closed Tuesday at their highest levels since 1993 and 1994, when the companies went public, respectively.
Related Stories
Contractors | Oct 7, 2022
Nonresidential construction spending down 0.4% in August, says ABC
National nonresidential construction spending was down 0.4% in August, according to an Associated Builders and Contractors analysis of data published today by the U.S. Census Bureau.
Multifamily Housing | Oct 7, 2022
Design for new Ft. Lauderdale mixed-use tower features sequence of stepped rounded volumes
The newly revealed design for 633 SE 3rd Ave., a 47-story, mixed-use tower in Ft. Lauderdale, features a sequence of stepped rounded volumes that ease the massing of the tower as it rises.
Giants 400 | Oct 6, 2022
Top 100 Medical Office Building Architecture + AE Firms for 2022
CannonDesign, Perkins Eastman, HGA, and E4H Environments for Health Architecture top the ranking of the nation's largest medical office building (MOB) architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Oct 6, 2022
Top 100 Outpatient Facility Architecture + AE Firms for 2022
Perkins and Will, HDR, CannonDesign, and Massa Multimedia Architecture top the ranking of the nation's largest outpatient facility architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Oct 6, 2022
Top 130 Hospital Facility Architecture + AE Firms for 2022
HDR, HKS, CannonDesign, and Stantec top the ranking of the nation's largest hospital facility architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Oct 6, 2022
Top 115 Healthcare Sector Contractors + CM Firms for 2022
Turner Construction, Brasfield & Gorrie, DPR Construction, and JE Dunn Construction top the ranking of the nation's largest healthcare sector contractors and construction management (CM) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report. Note: This ranking factors all healthcare sector work, including hospitals, outpatient facilities, and medical office buildings.
Giants 400 | Oct 6, 2022
Top 90 Healthcare Sector Engineering + EA Firms for 2022
Jacobs, AECOM, WSP, and IMEG Corp. head the ranking of the nation's largest healthcare sector engineering and engineering/architecture (EA) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report. Note: This ranking factors all healthcare sector work, including hospitals, outpatient facilities, and medical office buildings.
Giants 400 | Oct 6, 2022
Top 170 Healthcare Sector Architecture + AE Firms for 2022
HDR, CannonDesign, HKS, and Stantec top the ranking of the nation's largest healthcare sector architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report. Note: This ranking factors all healthcare sector work, including hospitals, outpatient facilities, and medical office buildings.
Designers / Specifiers / Landscape Architects | Oct 6, 2022
DAHLIN announces acquisition of Design Line Interiors
DAHLIN Architecture | Planning | Interiors announced today that it is expanding its interiors capabilities with the acquisition of Del Mar, California-based Design Line Interiors.
Contractors | Oct 6, 2022
Modular construction gets boost from impacts of the pandemic
The impact of the Covid pandemic on the construction industry appears to be fueling demand for modular construction methods, especially in the western U.S. and Canada.
