A Multifamily Construction Rundown
Signs of stability?
Construction Trend Tuesday—sometimes even on Thursdays!—covers one (hopefully) interesting industry trend in a quick, two-minute read. You can access the archive of CTT posts here.
Multifamily construction boomed in 2021-23. The number of units under construction surged to nearly 1 million, the highest level on record.
Multifamily building conditions were perfect. Both borrowing costs and vacancy rates were historically low.
While rent growth was historically high.
Those tailwinds flipped around and are now gusting directly in the industry’s face. Borrowing costs and vacancy are stubbornly high, rent growth is virtually nonexistent, and materials price escalation is heating back up.
The good news is that the market has stabilized over the past few quarters, with both starts and permits approaching the pre-pandemic level.
Despite this stabilization, the market won’t fully rebound until borrowing cost fall and rent growth picks up.
What’s Next
Next up is Week in Review, our every-Friday post that covers all the economic news and data in a breezy, five minute read.
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