Multifamily Starts Up Slightly, But Sector to Remain Weak for a While

By Anuradha Kher, Online News EditorWashington, D.C.–Multifamily starts were up again in May after a sharp drop in April, according to the Census Bureau’s latest report. On a seasonally adjusted basis, starts stood at 124,000, which is an increase of 77.1 percent from April but still down 58.6 percent when compared year-on-year. The multifamily as…

By Anuradha Kher, Online News EditorWashington, D.C.–Multifamily starts were up again in May after a sharp drop in April, according to the Census Bureau’s latest report. On a seasonally adjusted basis, starts stood at 124,000, which is an increase of 77.1 percent from April but still down 58.6 percent when compared year-on-year. The multifamily as well as overall housing starts have been falling consistently this year, reaching a new low of 70,000 in April. Overall housing starts in May went up to 532,000. This is 17.2 percent above the revised April estimate of 454,000, but is 45.2 percent below the May 2008 rate of 971,000. While experts believe these levels of construction could mark a bottom, there is no reason to believe that they are the starting blocks of a turnaround.Economists say the multifamily sector is likely to stay weak for a while, as evidenced by half-finished apartment towers across the country, the number of condo projects that are renting out units as a way to make money, and the numerous companies launched to restructure and help with distressed multifamily construction loans.

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