According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts remained elevated during the first quarter of 2023. For the first quarter, 127,000 multifamily residences started construction. Of this total, 123,000 were built-for-rental use.
The market share of rental units of multifamily construction starts stood at an elevated 96% for the first quarter as the already small condo market remained held back due to 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 first quarter, there were just 4,000 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 first quarter 2023 data, the average square footage of multifamily construction starts ticked up to 1,065. The median increased to 1,018 square feet.
The share of multifamily starts that are dedicated to rental properties remains elevated, highlighting the continued demand for construction loans.