Construction of Multi-Family housing is reshaping the Florida and Georgia housing market and economy. As baby boomers age and downsize, they move into apartments, condominiums and assisted living facilities, this has caused an enormous shift in the multi-family housing demand.
According to a recent article in World Property Journal, A steep jump in multifamily production nationwide boosted U.S. housing starts in June 2015, which rose 9.8 percent to a seasonally adjusted annual rate of 1.174 million units, according to the U.S. Department of Housing and Urban Development and the Commerce Department.
Multifamily production was up 29.4 percent to a seasonally adjusted annual rate of 489,000 units while single-family starts edged down 0.9 percent to 685,000 units.
“The multifamily gains this month are encouraging and show that the millennial generation continues to be drawn to the rental market,” said NAHB Chairman Tom Woods, a home builder from Blue Springs, Mo.
“While builders are reporting overall confidence in the housing market, they continue to note difficulties accessing land and labor,” said NAHB Chief Economist David Crowe.
The Wall Street Journal, explains; U.S. home construction surged in June, driven by demand for the apartments and condominiums that new households tend to favor.
Housing starts rose 9.8% from a month earlier to a seasonally adjusted annual rate of 1.17 million in June, the Commerce Department said Friday.
The gain was driven entirely by construction of multifamily housing units, mostly rental apartments, which rose 29.4%. Starts on single-family units, which represent almost two-thirds of the market, dropped 0.9%.
New applications for building permits, a bellwether for construction in coming months, increased 7.4% to 1.34 million.
“In contrast to the multifamily segment, which has been on a clear upward path for some time now, the single-family segment continues to amble along, heading higher but not with any great sense of urgency,” said Regions Financial Corp. Chief Economist Richard Moody. “Clearly, if slow and steady is your thing, the single-family segment of the housing market is the place for you.”
A pickup in household formation among younger adults, as well as rising rental rates, are helping drive the upward trend in multifamily construction and new permits, some economists and observers said.