Why Multifamily Housing is Booming (and Single-Family Isn’t)

September 9, 2014

by David Schawel, CFA

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The rebound in single-family housing has been tepid. Investors must understand the underlying structural changes, especially why demand has shifted toward multifamily housing and why this shift will persist in the years ahead.

As shown below, the rebound in housing starts has been uneven between single-family and multifamily housing. Single-family housing has rebounded from a trough of approximately 400,000 annual starts to 650,000, but it remains well below the peak of 1.8 million in 2006. It’s a very different story in multifamily housing, in which housing starts are now at levels equal to or greater than pre-crisis at approximately 440,000.

Single-Family Housing Starts (In Thousands)

Multifamily Housing 1

 

Multifamily Housing Starts (In Thousands)

Multifamily Housing 2

 

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