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Recent headlines have highlighted significant issues in housing markets across the United States, notably the shortage of homes. According to Realtor.com and Freddie Mac, the U.S. needs over 1.5 million additional homes to alleviate this shortage.
However, there’s a positive development: an increase in planned multifamily home constructions, a trend that has emerged during and after the pandemic.
Construction Coverage reports that the number of new multifamily units authorized remained stable for several years pre-pandemic, but there has been a noticeable change in recent years. Here are the top ten U.S. cities for multifamily housing, along with their share of new housing units authorized in multifamily structures:
Notably, areas with substantial existing multifamily housing, such as New York and Massachusetts, have seen high increases in authorizations. Additionally, there is a noticeable surge in the Midwest and West, regions that have traditionally had lower concentrations of multifamily housing.
This trend raises the question of whether it will drive down rent prices. According to Construction Coverage, “Multifamily housing increases the density and availability of housing units in urban and suburban locations, and it is more efficient and cost-effective to develop than single-family stock.”
In alignment with the principles of supply and demand, an increase in housing supply coupled with stable or reduced demand could lead to lower rental prices. It seems these economic rules apply to the housing market as well.
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By Proptechbuzz
By Ravi Kumar
