New housing construction and remodeling activity made its largest contribution to the national economy in about two years during the latest quarter.
This was the fourth consecutive quarter of beneficial contributions, according to Freddie Mac's May 2012 Economic Outlook. Some of that growth was the result of remodeling activity on existing housing, while another significant factor was the recent increase in multifamily construction starts. The number of rental apartments being developed in the U.S. has risen after years of slow activity.
While rents in some markets have grown more expensive than home prices, the GSE's report suggests that situation may last only briefly. Home prices have likely reached the lowest levels they are going to before rebounding in many areas. Affordability is likely to motivate an uptick in home purchases, the analysis indicates. Stability in the single-family market will be good for the economy as a whole, and may have some benefits even for the rental industry.
Economic stability should promote more job creation, which experts say may be the limiting factor on apartment demand and rent levels in many areas. At the same time, the shift away from homeownership and toward renting may be a lasting one, according to some analyses. While the multifamily sector may not gain ground for much longer in that respect, rental property management companies and landlords may still experience a long-term improvement over the pre-recession balance.