Notes: Gray shading depicts National Bureau of Economic Research (NBER)-defined recession. Data series extend through October 2023.
Sources: U.S. Census Bureau, NBER, and author’s calculations. All data sources accessed via Haver Analytics.
Builders have been completing multifamily units during 2023 at the highest rate since the mid-1980s (blue line). The time to build multifamily units has recently been averaging about 18 months, making the rate of construction starts 18 months earlier (green line) a good predictor of completions. Based on this lag, completions are likely to surge further through at least the first half of 2024. With the deluge of new apartments going on the market, multifamily vacancies have already rebounded a percentage point above their pre-pandemic rate and are likely to continue to move up, putting downward pressure on rent inflation.
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