Any semblance of average in the state of the nation’s housing is being pulled apart by two extremes: robust construction to meet demand for move-up products targeting upscale buyers and the dearth of affordable rental and entry-level housing, particularly for Millennials who are slow to form their own households. However, the housing sector has shown enough momentum to be a growth engine for the U.S. economy, according to The State of the Nation’s Housing report released by the Joint Center of Housing Studies of Harvard University.
The housing sector should average at least 1.6 million starts a year over the next decade when factoring in an expected increase in households and the need to replace older units and meeting the demand for vacation homes and other uses. Single-family starts and completions in 2015 reached their highest level since 2008 at 715,000 and 647,000 units respectively.
Single-family construction is set to expand in 2016 with permits during the first four months already increasing to a seasonally adjusted average of 730,000 units. Multifamily activity grew more than 10 percent for the fifth straight year reaching a 27-year high of 397,300 units. For the fourth consecutive year, multifamily units accounted for more than 30 percent of housing starts compare with averaging 20 percent between 1990 and 2010.
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