Rental Construction Accounts for 96% of Multifamily Starts

Multifamily rental construction starts remained at historic highs during the first quarter of 2021, with for-sale units making up just 4% of total multifamily starts. The share of rental multifamily construction has exceeded 90% since about 2010, according to data from the National Association of Home Builders. As suburban markets experienced increased demand during the pandemic, condo and other for-sale multifamily starts have declined. Rental construction accounted for 96% of multifamily starts last quarter. There were just 15,000 condo starts during the last four quarters, compared to 28,000 from the previous four quarters.

An elevated rental share of multifamily construction is holding typical apartment size below levels seen during the pre-Great Recession period. According to first quarter 2021 data, the average square footage of multifamily construction starts declined to 1,068, off from the post-recession high set at the start of 2015 (1,247 square feet). The median was 1,016 square feet for the first quarter of the year.