Apartment construction hits 25-year high

The Commerce Department data released on August 19 suggests that, looking at a rolling 12-month total of multifamily starts without any seasonal adjustment, construction has hit its highest level since 1989 for the year ending in July.

This is less significant for economic growth than single-family homes, which have a bigger multiplier effect on both consumer spending and job growth, the Wall Street Journal reports.

“We will take what economic activity we can get, but our housing market model was designed in the U.S. to build a lot of single-family homes for owners, not multifamily homes for renters,” Diane Swonk, chief economist of Mesirow Financial, wrote Tuesday on the company's blog.

The boost to apartment construction, however, suggests that job gains are encouraging the creation of households, and that consumers' needs will require more construction, both for renters or for owners.

Renting has become popular, at least in part, because many Americans cannot afford the down payment for a house or can't get a mortgage, and others prefer the flexibility that comes with a lease.

Soon, however, rising rents could encourage renters to buy homes. A Labor Department report notes that rents were rising at their fastest pace in five years this July, up 3.3% from last year.

With apartment construction hitting a 25-year high, it's not surprising that apartment company stocks have been doing well. Shares of Equity Residential (EQR -0.13%) and AvalonBay Communities (AVB +0.22%) closed Tuesday at their highest levels since 1993 and 1994, when the companies went public, respectively.

Two of Perkins Eastman’s firm leaders—Mary-Jean Eastman, FAIA, Vice Chair and Managing Principal of its New York City studio, and Barbara Mullenex, AIA, Managing Principal of the Washington, D.C., studio—will share anecdotes about their personal journeys to the top of a global architecture, design, and planning firm, at Building Design+Construction's fourth annual Women in Design+Construction Conference. The event will take place November 11-13, 2019, at the Fairmont Scottsdale Princess resort in Scottsdale, Ariz.

Row New York Boathouse, courtesy Foster + Partners

Sports and Recreational Facilities | Jun 27, 2019

Foster + Partners unveils design of wooden boathouse for Row New York

The project will sit on the banks of the Harlem River in Sherman Creek Park.

A new McKinsey report says factory-built modular construction could be next big shift in the industry.

Building Tech | Jun 26, 2019

Modular construction can deliver projects 50% faster

Modular construction can deliver projects 20% to 50% faster than traditional methods and drastically reshape how buildings are delivered, according to a new report from McKinsey & Co.