Magazine article Mortgage Banking

Multifamily Sector Declined in 2007 from Previous Year

Magazine article Mortgage Banking

Multifamily Sector Declined in 2007 from Previous Year

Article excerpt

The multifamily housing sector did not fare well in 2007 compared with the previous year, according to a report by the Department of Housing and Urban Development (HUD).

The number of permits, starts and completions decreased and the absorption of new apartments declined, while the vacancy rate increased in 2007, noted the HUD report, U.S. Housing Market Conditions.

The 2007 annual total for multifamily permits was 349,500, down 9 percent from 2006. Construction was started on 275,700 multifamily housing units in 2007, down 5.8 percent from 2006. Furthermore, completions of multifamily housing units totaled 252,500 units, down 11.2 percent from 2006, said HUD.

The vacancy rate for rental units increased slightly in 2007 to 9.8 percent, up 0.1 percentage point from 2006 but down 0.4 percentage point from the record high of 10.2 percent in 2004.

The absorption or lease-up rate for newly completed apartments declined through the third quarter of 2007, with about 53 percent of new apartments completed in the past year rented within three months of their completion--the lowest level in the 37-year history of the data series. …

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