2012 to be Strong Year for Multifamily Construction StartsAnalysts at Capital Economics predicted a significant rise in both single-family and multifamily housing construction starts for 2012, a development which experts anticipate will improve the overall housing market this year. Multifamily housing construction starts rose 56% in 2011 and further growth is expected as rental vacancy rates fall to new lows. Capital Economics predicts a continued rise in demand over the next few years, with an anticipated 850,000 households joining the rental sector yearly. Analysts at the firm suggest this demand will boost multifamily construction starts by as much as 50% in 2012. Likewise, prospects are favorable this year for single-family home constructions starts, which experienced a 9% decline in 2011. Capital Economics puts the market inventory of single-family homes at a diminished 6.7 months of supply, a drop which may serve to stimulate new construction. Single-family construction starts are not expected to rise as significantly as multifamily starts, with analysts predicting 10% growth in 2012. However, despite a slower rate of growth, the National Association of Home Builders put home builder confidence in the single-family home at a four-year-high this month. With the news of this growth in confidence, experts at Barclays Capital see 2012 as a turning point for the housing market. That combined with the HARP 2 Refinance which will allow underwater homeowners refinance their mortgages will be good news for the economy. One Barclays analyst, Stephen Kim, affirmed this positive stance, stating that these reports suggested "an early read on a strong Spring selling season." |
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