Economy Watch: Multifamily Construction Spending Nears Pre-Recession High
- Apr 20, 2018
Spending on U.S. multifamily construction totaled more than $61 billion in 2017, which is nearly four times the amount in 2010, the worst year after the recession, according to a recent report by Apartment List. Moreover, spending was fairly broad, with multifamily construction topping $10 billion each in 14 of the nation’s 25 largest metros between 2010 and 2016.
The 2017 total for multifamily is just 2.6 percent short of the pre-recession peak of 2006. By contrast, single-family construction has failed to recover to the same extent, with real spending still at less than half its pre-recession peak level.
Also in 2017, multifamily housing made up 18 percent of all new residential construction spending, up from just 7 percent in 1993, when Apartment List’s data begins. The share of new residential spending going to multifamily construction increased in all of the 25 largest metros after the recession, in some cases booming. For example, in San Diego, multifamily housing accounted for 19.7 percent of spending on new residential construction in 2000, while that share had mushroomed to 59.5 percent by 2016.
The growing tech markets of Seattle and Denver had the highest levels of per-capita spending on multifamily construction after the recession, Apartment List said. Although housing markets in these places have struggled to keep pace with their booming job growth, the recent influx of apartment supply has helped to temper rent growth.