Dive Brief:
- The totals for the past 12 months show that the year that ended July 31 saw the highest number of starts since 1989. The 15-plus% increase in residential starts announced this week favored multifamily rather than single-family housing.
- Another illustration of how multifamily is dominating the recovery is that year-to-date building permits for multifamily buildings are up 17.5% compared with 2013, while single-family permits are 0.8% higher.
- The post-recession job recovery has brought back as many jobs as were lost, but not the same kinds of jobs at pre-recession pay, which is why renting is more attractive to many people. However, July's numbers saw rent prices rising at the fastest pace in five years—so renting may not continue to be the affordable solution much longer.
Dive Insight:
A downside of growth toward multifamily homes is that apartment buildings have a lower economic multiplier effect than single-family homes have. Diane Swonk, who is the chief economist of Mesirow Financial, told The Wall Street Journal that the U.S. economy's model for housing is built on single-family ownership, not renting.