October home construction rates may have fallen, but apartment permits rose nearly 30 percent last month, bringing overall building permits up over 11 percentage points.
In the last year, apartment projects have increased over 63 percent, signaling a shift in consumer behavior as the housing market remains volatile. Falling income for the majority of Americans coupled with high unemployment and job insecurity have led many families and potential home-owners to opt for rentable units – not to mention the tens of thousands evicted from their properties because of bank-enforced foreclosures.
With plummeting single-family home prices and market over-saturation, multi-family complexes have been on a relative tear – offering a glimmer of hope for a struggling construction industry. Home building levels in 2009, for example, were at the lowest rates in over 50 years. Newly built homes can’t compete with the record-low sales of previously owned housing, but demand for apartment living is on the rise.
Whether this will be enough to substantially impact the construction industry, experiencing the worst decline in jobs and output in generations, remains to be seen. While the influences behind the increase in permits are sobering, any rise in building rates is good news for such a flat market.