Multifamily Built-for-Rent Remains Elevated

According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts remained elevated during the third quarter of 2023. For the quarter, 104,000 multifamily residences started construction. Of this total, 101,000 were built-for-rent.

The market share of rental units of multifamily construction starts was near an all-time high of 98% for the third 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 third quarter, there were just 3,000 multifamily condo construction starts.

An elevated rental share of multifamily construction is holding typical apartment size below levels seen during the pre-Great Recession period. According to third quarter 2023 data, the average square footage of multifamily construction starts moved down to 1,032. The median declined to 979 square feet.


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