Dive Brief:
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Construction of multifamily housing has rebounded to pre-recession levels, surpassing the recovery of the single-family market, according to the CFA Institute, the association of investment professionals.
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The industry owes its strong showing to a dip in homeownership this year to its lowest level since 1995; slightly more than 67% of Americans own homes. When homeownership wanes, more people rent.
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At the same time, rental vacancy rates are at a 20-year low, and rental prices are climbing. In fact, average rent paid for a unit in a multifamily property tops the record set in 2008.
Dive Insight:
The demand for multifamily housing will likely keep growing, analysts speculate, as an aging population relieves some of the demand for single-family homes. In addition, getting a mortgage for a condo is easier than for a house, according to analysts. Advice from the report’s authors: “The investor community needs to wake up and stop waiting for a substantial rebound in single family housing, as multifamily housing has already rebounded and will exhibit most of the growth going forward.”