Housing Starts: Multifamily Will Bring Down High Rents
The housing starts report dropped Thursday, showing a 3% drop after accelerating all year. Despite the market stabilizing a bit, the number of buildings with five or more units under construction is at the highest level since Dec. 1974. This lack of supply for growing demand, especially among Millennials entering the work force, is pushing up rents—which underpins inflation—and sending rental vacancy rates down to the lowest point since 1985. The Commerce Department (shown: the Department's DC HQ) hopes a greater supply of multifamily units will bring rates down to more moderate levels. Bank of America deputy head of US economics Michelle Meyer agrees with the Commerce Department’s optimistic expectations, but says that these units will take time to build and rental inflation will stand firm for a year or more. [Bloomberg]
