The construction of new multifamily units hit a 20-year high in 2016. And the building boom shows few signs of slowing.
That’s the key point from the 2017 Apartment Statistical Analysis report released earlier this month by St. Louis-based RubinBrown. According to the company’s research, 321,000 multifamily units were completed in 2016, the highest number since 1999.
RubinBrown researchers say that rental units remain a growing market, and that this new construction is not just a temporary correction from the Great Recession. In 2016, the new construction of apartment units saw an uptick of 5 percent from the averages seen in the early 2000s. The amount of new construction even beat out 2015’s impressive completion of 306,000 new apartment units.
And if you’re looking for more signs of a strong market? RubinBrown found that the national rental vacanc rate stood at 6.9 percent in 2016, a 30-year low. The Housing Vacancy Survey found that the number of households that are renting increased by 600,000, the 12th consecutive year that this number has grown.
More than 80 percent of the new rental units were in properties consisting of more than 20 units.
“Low vacancy rates, along with the increase in rents, indicates that multifamily rental properties continue to perform well,” said Bryan Keller, partner-in-charge of RubinBrown’s Real Estate Services Group. “Looking forward, we can expect 2017 to be another good year for the multifamily housing market. However, there is concern that the rising rents and abundance of new developments will create a growing affordability issue in the years to come.”
