Rental Society: Single Unit Housing Starts Fall 2.15% While 5+ Unit Starts Rise 25.54%

Confounded Interest ^ | 08/16/2013 | Anthony B. Sanders

[whitedog57]

According to the Commerce Department, US housing starts rose 896,000, a little lower than expectations of 900,000. This follows a revised print of 846,000.

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That is the headline news. But 1 unit starts were DOWN 2.15%. Multifamily starts were up 25.54%.

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Single unit starts were rising with homebuilder confidence, but that has changed recently.

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Building permits have been increasing since January 2009.

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But 1 unit permits fell 1.92% while multifamily (5+ units) permits rose 13.48%.

What gives? According to Bloomberg,

“Builders are contending with a limited supply of available land as well as rising interest rates that are marking up the cost of homeownership versus renting. Further gains in employment and increases in home prices are needed to help sustain demand in an industry that has supported growth in the world’s biggest economy.”

Sounds reasonable. But HUD Secretary Shaun Donovan is realizing his dream of a green energy, rental society.

And face it, with poor earnings growth and employment for younger households, we are becoming a rental society. See Logan Mohtashami’s website for a good discussion.

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[whitedog57]

Agenda 21 and gov't central planning?

[RoosterRedux]

This is how the housing cycle operates.

After a housing bubble bursts and the housing market is in a slump...it emerges first with a greater demand for rental units and then slowly shifts to an increased demand for single family housing.

[Gaffer]

It would be highly interested exactly what percentage of that +25% increase in 5+ housing units are because of Section 8?

My thinking is single unit owners are way too wise now about the destruction their government leeches cause and aren’t willing to continue with ‘easy government money’ anymore whereas rats like living together and the economies of scale in neglected repairs, aesthetics, etc. are more easily hidden in an apartment complex.

[wbill]

Possible.

I see it more as the free money spigot is getting turned off, and people who can't get money are now renting.

I know that the difference between getting a mortgage now, from 10-12 years ago, is like the difference between shooting a bullet and throwing it.

10-12 years ago, I was pre-approved for a loan that would have given me payments higher (substantially higher) than what I was making per month at the time.

More recently, I still got a mortgage, but only was pre-approved for what I needed and not a penny more. Lots more hoops to jump through as well.

It's a major PITA for low risks (like myself), but overall, I think it's likely a good thing.

[Buckeye McFrog]

Once everyone is renting it becomes easy to build a Socialist movement around “the RENT is TOO DAMNED HIGH!”