Among the effects of the COVID-19 pandemic on the US housing market is an expected drop in multifamily housing construction, particularly of apartment and condominium complexes in the nation’s urban centers due to such factors as:
- a slowdown or stoppage in construction as ordered by state governors and local mayors
- state and local governments – facing precipitous declines in tax revenues – will reduce funding on a wide range of projects, including the construction of affordable housing
- wariness of committing to large-scale projects among construction firms due to economic uncertainly and concerns about their own financial positions
This dropoff in multifamily housing construction could be especially severe for those active in building housing units for low- and middle-income families. As the US already faces a shortage of affording housing, any fallback in the building of these units could be especially dire.
However, one potential bright spot is the nation’s prefabricated housing industry, which can provide the moderately priced housing units increasingly in short supply across the US. These residences include:
- manufactured homes that increasingly offer the designs and amenities seen in traditional site-built residences
- modular housing units that can be used to more rapidly and inexpensively erect apartment buildings in US cities
- accessory dwelling units – “tiny homes” – which can solve housing shortages by providing small residences that can be installed nearly anywhere
For more information about the US prefabricated housing industry, see the Freedonia Group’s recently published study, Prefabricated Housing.