The nation’s housing market is in recovery. The most recent release on housing starts indicates that new home construction has risen to its second highest level since two thousand and seven, with much of that gain driven by apartment projects. While that sounds like good economic news, it could also mean that the housing market’s improvement is having slightly smaller impacts on the performance of the overall economy – this according to Moody’s Analytics.
That’s because single family home building has relatively greater economic impact than apartment construction on a per unit basis. Each multifamily housing start supports about two jobs over the course of a year, while each single family start creates between four and five. Apartments are typically smaller than single family homes and therefore fewer building materials need to be transported, fewer walls constructed, and fewer appliances installed.
On the other hand, more apartment construction could help ease pressure on rents, which have been rising so quickly, that they are impacting overall inflation figures. As reported by Bloomberg Business, the cost of living in the U.S. rose in June for a fifth straight month, with rents climbing the most in nearly two years.
