While multifamily housing construction is surging, the single family sector’s recovery remains limp. Even though all measures indicate the sector is improving, having increased by 53 percent since 2011, housing starts fell to such remarkable lows during that downturn that such a gain still leaves activity at a historically weak level, according to the 2015 Dodge Construction Outlook.

Bob Murray, chief economist and vice president of McGraw Hill Construction, said that after rising by 25 percent in 2012 and 21 more percent in 2013, single family housing has stalled in 2014, rising just 1 percent to 630,000 units. The stagnation is due to tight lending standards making it difficult for lower and middle income households to get mortgages, he said.

But it wasn’t all bad news. There are several factors that should cause the market to strengthen.

“Inventory of new homes for sale fell to 3.9 months in January 2013 which is the lowest since 2004 before edging back up to six months,” Murray said, which can help with home pricing. He also mentioned the “record low mortgage rates” and recent discussions between Fannie Mae, Freddie Mac and other lenders that “may help expand access to mortgages” since the 20 percent down payment requirement is stifling access to capital.

Also, while single family housing only rose by one percent in 2014, 2015 is projected to be a little better, moving from 630,000 units to 700,000, or an 11 percent gain.

Leave a Reply

Your email address will not be published. Required fields are marked *