RE: The building boom is in multi unit, not single unit housing. This indicates a strong demand now, and in the foreseeable future in rentals.
Very good observation.
My daughter is a construction loan administrator at the New York Community Bank and she does observe a uptick in multi-unit construction in the last 6 months.
People aren’t ready to buy now, but they’ve got to live somewhere, and the multi-unit housing is the place to go...
Constructors also have the incentive to start building due to historic low interest rates.
The low interest rates are the icing on the cake. Unfortunately, builders will build as long as banks will lend money to fund the construction - that is why there is such a glut in single family homes (both on the market and in shadow inventory - REO or otherwise). The same is happening in MF right now. MFU's at least have the POTENTIAL to generate cash flow immediately, but the current rate of occupancy for apartment complexes is dropping due to the increased availability of units. Cash flow is being destroyed as a result. Developers and builders beware!