The United States Department of Commerce and the Department of Housing and Urban Development recently announced that, for the first time since 2007, the annual rate of residential real estate starts surpassed 1.3 million units. Housing starts spiked by an incredible 25.5 percent in October 2016, driven by an increase in the production of both single-family homes and multifamily residential properties.
The surge marked a 68.8 percent month-on-month increase in multifamily production. The multifamily sector, which experienced uncharacteristically weak growth in September 2016, represented the highest number of single-family property starts since October 2008. The 10.7 percent jump in new single-family property construction brought the sector’s seasonally adjusted rate to 869,000 units, while multifamily production reached 454,000 units. This amounted to a double-digit increase in residential starts across all four of the United States’ regional real estate sectors.
Ed Brady, an Illinois real estate developer and chairman of the National Association of Home Builders (NAHB), cited a healthy job market and economy as factors influencing growth in the housing sector. Positive economic markers have served to bolster optimism among builders, leading to a surge in new construction throughout the housing market. As noted by NAHB chief economist Robert Dietz, this massive spike in housing production is not sustainable. However, it appears to herald an upcoming period of growth and prosperity for America’s residential real estate sector.
