Multifamily Construction Boom
Demand for rental properties is high. Multifamily properties are benefitting from the lowest home-ownership rate since 1998 according to a recent report. Apartment construction reached a 50-year low in 2009 but is now experiencing a robust rebound despite attractive purchase options in today’s housing market.
Building permits for U.S. apartments rose 56% over the past year. In New York, permits rose 73% and in the five most-active construction markets — Dallas, Houston, Los Angeles, Washington and Seattle — it more than doubled.
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Low-cost, government-backed (agency) financing is fueling the fueling the multifamily construction boom and some believe that it may lead to a bubble in this sector. Agency CMBS (commercial mortgage-backed securities) rose to 57 percent of the total supply of commercial mortgage bond issuance – $33.9 billion in 2011.
Last Updated on January 13, 2013 by Ramin Seddiq