Multifamily Built-for-Rent Share Rises

According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts remained elevated during the fourth quarter of 2022. For the fourth quarter, 133,000 multifamily residences started construction. For 2022 as whole, 525,000 rental apartments started construction.

The market share of rental units of multifamily construction starts increased to almost 98% as the already small condo market retreated on higher interest rates. In contrast, the historical low share of 47% was set during the third quarter of 2005, during the condo building boom. An average share of 80% was registered during the 1980-2002 period.

For the fourth quarter, there were just 3,000 multifamily condo construction starts. This is less than half the total from a year ago.

An elevated rental share of multifamily construction is holding typical apartment size below levels seen during the pre-Great Recession period. According to fourth quarter 2022 data, the average square footage of multifamily construction starts ticked down to 1,042. The median increased to 1,001 square feet.

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