Housing Research Brief

Single-family accounts for a growing share of development. Multifamily and single-family construction trends are moving in opposite trajectories, as the apartment sector responds to a supply-induced fundamental softening while the home market remains substantially undersupplied. In March 2024, single-family houses comprised over 77 percent of residential starts, the highest share for that month since 2010. That same dynamic is likely to continue as well, with multifamily permit activity falling 20 percent year-over-year in March while single-family permits increased by nearly that same margin. These divergent trends should be beneficial for both sectors longer term. A shortage of single-family homes on the market has fueled robust appreciation, which, paired with elevated interest rates, has put homeownership out of reach for a rising share of the population. Multifamily development accelerated to help fill the gap; however, that ongoing supply infusion is putting upward pressure on vacancy. A longer-term hike in homebuilding and a deceleration in multifamily construction should help provide greater parity.