According to the latest quarterly U.S. Census Bureau data, with further analysis provided by the National Association of Home Builders (NAHB), the market share of rental units of multifamily construction starts declined to a reading of 93.4% in Q3 2021. This is the lowest share since Q1 2020.
From a historical perspective, the lowest share of 47% was set during Q3 of 2005 during the condo building boom. Between 1980 and 2002, the average share was 80%.
The minute market shift occurred as quarterly condo production increased to 8,000, matching a post-2016 high. During the last four quarters, however, there were still only 22,000 condo units that started construction, compared to the prior four quarters.
Elevated rental share of multifamily construction is holding the typical apartment size below levels seen during the pre-Great Recession period. According to third quarter 2021 data, the average square footage of multifamily construction starts ticked up to 1,053. The median was just 1,000 square feet.
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Multifamily Condo Production Showing Gains?