Oct
22

Apartments Drive Residential Construction Gains in September

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home constructionConstruction companies built more apartment complexes in September, sparking a temporary rise in housing starts for a real estate market that otherwise appears to have crested during the summer.

Housing starts last month rose 6.5 percent to a seasonally adjusted annual rate of 1.21 million homes, the Commerce Department said Tuesday. But a 17 percent surge in multi-family housing — which includes apartments — accounts for almost all of that increase.

New construction and sales of existing homes surged in the first half of the year as more Americans found work and the unemployment rate dipped to a solid 5.1 percent. But tight inventories, rising prices and the absence of meaningful wage growth have capped growth as affordability has become an issue — a problem that new construction can help resolve.

“Builders are stepping up to meet that demand but doing so cautiously,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “So, for beleaguered buyers who can’t find what they are looking for because of a dearth of listings, there is a bit of help on the way.”

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