Is the great recession over? Are we there yet? These questions will remain unanswered, but I can tell you with a high degree of certainty that as household formation picks up steam multifamily construction is well below future demand.
Household formation drives demand in multifamily construction. As we see household formation accumulate to measurable numbers we will also see increasing construction starts. And this time, with a much sharper pencil with limited tertiary construction with a hope and prayer that “they will come”.
As job creation returns more adults will choose to leave living arrangements with family members caused by recessionary pressures. This increase in household formation will place added pressure on multifamily demand. As the rate of household formation increases, concurrent with years of low multifamily construction starts, vacancy will decrease and rent growth will escalate.
Read more...Multifamily Construction Starts and Household Formation | Multifamily Insight Blog
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