Crittenden Report Editors
Higher levels of manufactured housing and affordable rental construction could provide some relief, as occupancy rates across residential segments are historically high, according to research from Marcus & Millichap.
Class C apartment vacancy stood at just 2% entering the second quarter, halving the pre-pandemic equivalent. Meanwhile, manufactured housing availability declined between 2019 and 2021 in 99 of 143 metros, bringing the national rate down to 6.1% last year. Greater development will likely not hinder metrics, but rather help alleviate the backlog of demand, according to Marcus & Millichap.
The construction cost index rose in May for the fifth straight month, Marcus & Millichap reported, as supply chain headwinds and labor shortages continue to put upward pressure on the price of materials. Steel and concrete are each up more than 10% annually, while shortages of furnishings and appliances are exacerbating building expenses.
“Total residential project starts were up 15 percent year-over-year in April, buoyed by a 40 percent lift in multifamily groundbreakings. New supply is imperative to take the first step toward addressing the national housing shortage,” according to the Marcus & Millichap report.
A recently announced Housing Supply Action Plan from the Biden administration laid out a proposal to stymie inflation by enhancing housing inventory, in an attempt to bring down costs. The plan focuses largely on construction of affordable dwellings like manufactured housing, and reevaluating zoning rules to permit greater density.
