Despite “’extremely volatile’ multifamily starts,” NAHB Senior Economist Robert Denk said multifamily housing is still "slowing down from recent historical highs in response to a more sustainable demand," World Property Journal reported.
Vacancy rates and rent inflation still seem to indicate strong production. However, Denk still expects the sector to decline from a 2015 peak of 295,000 units.
Steven E. Lawson, president of Virginia-based The Lawson Companies, said interest rates going up and tax credit prices going down will affect affordable production, making the situation worse.
"The demand for affordable rentals already outstrips supply, and that imbalance will only get worse for a couple of reasons,” Lawson said. “First, demand will increase as the millennial generation fully enters the housing market, and second, those aging baby boomers with minimal savings will be looking for housing they can afford on a budget that depends primarily on Social Security."
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A group of panellists at this month’s National Association of Home Builders International Builders’ Show in Orlando said multifamily housing will continue to slow down in 2017.