Multi-family construction growth remains strong with pent-up demand and new family formation being the primary drivers. Affordability will be a continued problem for younger home seekers, especially in upscale areas and around major markets. In addition, mobility and uncertainty in the job market will keep new-home growth from booming in the near future even as apartment prices rise.
Another contributor to multi-family growth is the fact that new jobs and pay scales aren’t rising as fast as costs. The effect here is that single-family growth rates are down for most of the country. Another reason for slowing single-family growth is the long-term memory of foreclosures. Although the foreclosure inventory is down, according to a National Foreclosure CoreLogic March 2014 Report, “The inventory of homes in foreclosure and serious delinquency status is back to 2008 levels.” Even those who have not gone through foreclosure know someone who has, so renting still holds appeal over a possible foreclosure.
