Economists' Outlook

Housing stats and analysis from NAR's research experts.

Instant Reaction: Housing Starts, March 16, 2023

Apartment and multifamily housing construction continued its near 40-year high trends with 620,000 units started in February. The market is responding to solid rent growth and low vacancy rates of both apartments and single-family rental units. But with such active construction, plenty of empty units will be hitting the market throughout this year and the next. Rents will calm down – a preferred way to rent control – and will even drive the overall consumer price inflation to be manageable.

Single-family home construction is much more restrained. Only 830,000 units were started, well below the pre-COVID year of 2019, and lower than the one million units historical average and required given the normal population growth. It is understandable given high mortgage rates for homebuilders to be cautious. However, once rents and consumer price inflation calm down, mortgage rates will be lower. Will there be enough inventory to satisfy rising home purchase demand?