Condominium Market Lacking Momentum - 8/25/15
The housing market is now in its fourth year of recovery. Construction of single family homes and multifamily rentals has been rebounding. But for a variety of reasons, the nation’s condominium market is having difficulty regaining momentum. During the first quarter of twenty fifteen, condominium construction accounted for only five point five percent of all multifamily development in the U.S.
That represents the lowest ratio since the Commerce Department began tracking the figure in nineteen seventy four and well below the twenty four percent historic average. As reported in the Wall Street Journal, this creates an issue for developers, who often generate better returns from building condominiums than from apartments. Condominiums also play an important economic role.
While some are purchased by investors or second home buyers, many serve as entry level housing for young buyers, helping them to begin building equity they can use toward later home purchases. The National Association of Home Builders estimates that first time homebuyers will account for only eighteen percent of new home purchases this year, well below the twenty seven percent rate registered during more typical periods.