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Home construction is surging, but it’s leaving out struggling renters
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The National Association of Home Builders index hit a 35-year high this month — driven by low mortgage rates and strong demand for single-family homes in the suburbs and beyond. Meanwhile, U.S. home construction surged 22.6% in July, rebounding from a pandemic lull.
On the flip side, new construction for renters — which is to say, multi-family apartment buildings — is down in the pandemic.
Apartment market tracking firm RENTCafé predicts apartment construction will be down 12% from 2019 to the lowest level in five years.
Economist Robert Dietz at the National Association of Home Builders says that’s not good news for low- to middle-income renters who’ve suffered the most job losses in the pandemic.
“We still have an affordable rental housing crisis,” Dietz said.
Where apartment building continues to boom is places like Silicon Valley, Atlanta and Dallas, said Doug Ressler at RENTCafé’s parent company, Yardi Matrix.
“Tech centers, tech hubs — white-collar people that want to rent as lifestyle can work from home in terms of remote access,” Ressler said.
Going forward, Dietz predicts builders will put up fewer high-rises in dense urban areas and more suburban townhouses, where renters can social distance in the pandemic.
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