The U.S. Department of Commerce recently released a report that highlights the massive difference between new multifamily constructions and single-family homebuilding.
Statistics show that single-family housing starts took a significant plunge in March. In analyzing the Commerce Department report, Reuters also points out a “record backlog of homes approved for construction.”
On the other hand, the multifamily sector increased construction stats; so much so that it contributed to the highest annual rate since the month of June in 2006.
But what are the specific numbers, and what do investors need to know about the situation?
Single-family homebuilding faces 1.7% decline
First off, privately-owned construction beginnings, completions, and building permits saw a drop in percentage in March. Single-family homebuilding starts decreased by 1.7%, while completions tumbled 6.4% below February rates.
When you put things into perspective, 13% fewer homes were completed in March 2022 as opposed to March 2021.
However, multifamily had a 7.5% boost for project starts — the biggest leap since the beginning of 2020. And it’s easy to understand why.
This resulted in multifamily wins across the board, with the following March stats for buildings with +5 units:
- 672,000 building authorizations
- 574,000 construction starts
- 292,000 housing completions
What does this mean for real estate investors?
As an investor, everything in this latest report points to one thing, and one thing only:
MULTIFAMILY REMAINS THE #1 real estate INVESTMENT OPPORTUNITY.
No matter how you crunch the numbers, it’s obvious that apartments will continue to be in high demand — in any economy.
You can flip as many houses as you want. You still wouldn’t be able to create the wealth that dozens of units could.
Now, while the report I shared with you covers just March 2022, I know this sector will prosper month after month.