Builders and developers have enjoyed a strong the multifamily housing market for most of this year but securing to an equally strong 2024 may prove somewhat more problematic.
According to a new survey released by the National Association of Home Builders, a majority of builders classified current conditions as good, reflecting an improvement in general attitudes over last year.
Using what the NAHB calls a Multifamily Production Index with any reading above 50 indicating conditions are better than worse, the latest measurement came in at a healthy 56.
An ongoing increase in demand for multi-housing, observed NAHB economist Robert Dietz in a statement, “is being supported by the low availability and high cost of single-family homes on the market.”
But Dietz added that multi-family development appears to be challenged by many of the same supply side dynamics that are currently impacting the nation’s single-family sector.
Indeed, home builders responding to the NAHB survey pointed to the reduced availability of credit for new construction, problems getting individual projects approved, and insurance issues impacting new multi-family development.
Factoring in all of the pros and cons of the coming market, Dietz remarked: “On balance, we forecast that multi-family starts will decline during the second half of 2023 due to tight financing conditions and local concerns over supply.”
By Garry Boulard
