Multifamily construction much lower than in the past

Multifamiliy construction is improving, but it is still far lower than before.

Property management companies have constructed far fewer multifamily properties in recent years than during the 1970s and 1980s, despite the recent improvements in housing starts, according to Slate business writer Matthew Yglesias.

Despite the lower number of starts, rents have not fallen. In fact, the opposite has occurred, Yglesias wrote. There is worry that if new properties are not built more quickly, there could be a stagnation in rental growth.

The reason for a lack of new developments in the short-term may be financing, as many businesses are still unable to get a loan, Yglesias explained. Some investors may be wary of putting a large amount of money into a project due to the risk, but there may not be a reason to be so worried.

The federal government's attempts to keep affordability at a height may be helping, somewhat, but it also could be preventing some from getting into the market, Yglesias added. Due to this, the market may continue to slowly recover unless some sort of loan guarantee measure is approved.

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