The press was flush with reporting last week about strong housing data. It was one of just a few bright spots in the macro news. Elsewhere, subpar earnings announcements and a weak first quarter growth estimate from China pushed the S&P 500 to its largest drop since November.
The darling of commercial real estate, the multifamily sector dominated the housing starts data. From February to March, single-family starts declined 4.8 percent. But for properties with five or more units, starts jumped 26.9 percent and are 82.3 percent higher than a year earlier. For better and for worse, the rental market is still on fire.
Equating the Department of Commerce and HUD definition of multifamily with rental apartments is a common error that repeated itself in spades last week. It’s convenient to assume the two numbers are not far apart. But the assumption does not hold over time. Nor is it a random walk.
Read more...Don't Assume All Multifamily is Rental - Chief Economist Article - GlobeSt.com