The US continues to face a shortage of housing units, as evinced by strong housing prices and a lack of homes available for purchase on the market. However, the US also faces a shortage of multifamily housing (apartments and condominiums). These residences are equally important to the US housing market, as they provide homes for those unable or unwilling to purchase single-family residences. This cohort includes those with small households such as single people and empty-nesters, as well as retirees and others who prefer maintenance-free living. Furthermore, multifamily housing is often more affordable than single-family residences – an important consideration for those still struggling with the economic effects of the COVID-19 pandemic.
Therefore, a recent report stating that 2022 would be a strong one for multifamily housing is welcome news to the US housing industry. Increasing rents and rising property values make apartment construction a viable investment opportunity for firms looking for strong returns, while continuing demand for apartments and condominiums will encourage the construction of new complexes and the refurbishment of existing facilities. Many of these multifamily housing units will be located in urban areas, thus easing the shortage of affordable housing so often prevalent in many cities.
Increasing construction of multifamily housing units will also boost demand for a wide range of construction materials, key among them:
- cement and concrete – used not only for the structures themselves, but also related facilities, such as parking garages
- windows and doors
- lumber – especially for prefabricated roof, wall, and floor trusses
- plumbing fixtures and fittings
For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, particularly our series of studies in the Construction and Building Products catalog. Freedonia Custom Research is also available for questions requiring tailored market intelligence.