Apartment construction drives US homebuilding surge in June

[Omaha Steve]

Source: AP

By JOSH BOAK

WASHINGTON (AP) — U.S. builders broke ground on apartment complexes last month at the fastest pace in nearly 28 years, as developers anticipate that recent jobs gains will launch a wave of renters

The Commerce Department said Friday that housing starts in June climbed 9.8 percent to a seasonally adjusted annual rate of 1.17 million homes. All of that growth came from a 28.6 percent surge in multi-family housing that put apartment construction at its highest rate since November 1987. Starts for single-family houses slipped 0.9 percent last month.

The gains show that what had been a sluggish construction sector is now running on economic adrenaline. Strong job growth and a rebounding economy have increased the numbers of buyers and renters searching for homes, while gradually rising mortgage rates have spurred homeowners to finalize deals.

"The residential market recovery is here, and it is strong and sustainable," said Peter Ciganik, managing director at real estate investor GRIS Partners.

FULL story at link.



In this photo taken June 8, 2015, a worker carries a load of lumber at a new home construction site in Mechanicsville, Va. The Commerce Department reports on home construction during June on Friday, July 17, 2015. (AP Photo/Steve Helber)

Read more: http://bigstory.ap.org/article/f761d48737d04242a95d30ffa00f459d/apartment-construction-drives-us-homebuilding-surge-june

[KansDem]

1. Changing demographics?

Last edited Fri Jul 17, 2015, 10:31 AM - Edit history (1)

Preparing for the boomers retiring?

The article mentions this: But the financial distress has also left more Americans renting instead of owning, creating more need for apartments. The share of Americans owning homes has fallen so far this year to a seasonally adjusted 63.8 percent, the lowest level since 1989.

I'm certain the trend is due primarily to "financial distress" but I wonder how much of this building activity is also a result of changing demographics. Two schools near where I live have been closed: an elementary school was torn down and a rest home built in its place and a middle school closed with plans of building another rest home.

Simply more older folks than kids...

[Roland99]

2. I wonder if it's at least partially that new homes are so much more expensive (and expansive)

than in days past.

When I was a kid, a standard middle class home was 3BR, 2BA, maybe a basement, about 1,300-1,500sq ft on the main level.

Hard to find a new home nowadays that isn't well over 2,000sq. ft. with upgraded cabinetry and tile and decorative niceties and....

[TexasBushwhacker]

3. And we are more mobile

The days of working at the same place for decades are gone and people are getting sick of commuting. I can understand buying a house if you have kids at home, but decent small homes for singles, couples with no kids and senior citizens are hard to find. Newer condos and townhomes are just as expensive as houses. I owned a house that I bought as a foreclosure in the early 80's and lived in it for 12 years, but I never liked doing the upkeep. I like my apartment. If I got a job that was a long commute, I'd probably just move.