Multifamily Developers to Plug Some Holes in the Housing Shortage in 2022
- Swell in homebuying inflames shortfall. In late 2021, the single-family housing landscape mirrored the conditions witnessed earlier in the year. For-sale inventory of both existing homes and finalized new homes trailed historical averages.
- More rentals are needed to ease the imbalance. Builders of single-family homes are trying to ramp up the construction pace to meet strong demand but face barriers amid inflated material costs and labor shortages.
- Multifamily pipeline aligns with pockets of robust demand. Nationally, the U.S. is expected to add roughly 400,000 new rentals in 2022, a monumental number that is a record spanning back multiple decades.
- New-home sale stock climbs for eighth straight month. The number of newly built homes available for purchase surpassed 400,000 in November, rising in every month going back to April. Nevertheless, only 39,000 of those dwellings were fully completed when listed for sale while more than 25 percent had not yet started construction.
- Mortgage rates momentarily hold firm. After the 30-year mortgage rate jumped 20 basis points in October, it was unchanged at 3.1 percent in November. Mortgage rates will likely face upward pressure in the months ahead, however, as record inflation is poised to edge up the 10-year treasury yield.
Sources: Marcus & Millichap Research Services; Capital Economics; Freddie Mac; Moody’s Analytics; Mortgage Bankers Association; National Association of Home Builders; National Association of Realtors; RealPage, Inc.; U.S. Bureau of Labor Statistics; U.S. Census Bureau; Wells Fargo