Even though the National Association of Home Builders reports a marked decline in single-family construction, multifamily continues to flourish, especially in suburban markets.
NAHB’s Home Building Geography Index for Q3 reported large metro suburban counties saw apartment construction increase from a growth rate of 18% up to 27.5%. Construction in large metro core counties grew 7.1%. In large metro outlying counties, the growth rate decreased from 44.1% to 31%.
Experts attribute the growth to renters’ desire for walkable, modern living choices, which pushes new construction because those features are largely lacking in legacy apartments.
They warn, however, the sector could see a slowdown for 2024 and 2025 builds, as multifamily’s pace generally takes longer to both gain and lose momentum compared to single-family.
Northmarq President for Investment Sales Trevor Koskovich said Phoenix units under construction are up 23% over last year, and that approximately 90% of units under construction are in the market’s suburbs. (Source)