From Multifamily Executive:
Multifamily, on the other hand, is projected to slow down in terms of new starts in the coming years. In 2011, multifamily starts were up 56 percent. By the end of 2012, it is expected to grow 27 percent more. But in 2013, Crowe is expecting new starts to rise by only 6 percent, at 238,000 new starts. “We’ll still see an increase but it won’t be quite as dramatic, as we begin to catch up with the backlog needed to fill the rental demand,” said Crowe.
For now, multifamily will continue to ride the wave of high rental demand. Recently released data from Freddie Mac shows that for the year ending 2012, 1.5 million households moved into rental housing. And vacancy rates have dropped 2 percentage points nationally in the past two years. So single family still has a long way to go before it coaxes all these new renters back into homeownership.
“Further increases in rental demand are likely in the coming year as newly formed households postpone homeownership decisions until the economy strengthens and they have accumulated sufficient savings. Overall apartment market trends may show further vacancy declines and rent gains, with property values improving as well,” said Freddie Mac’s Chief Economist Frank Nothaft.