News from Marketwatch: "Government statistics released this week showed a pickup in the construction of multifamily housing. But the data most likely was influenced by a warm December. And it's just as possible that January's cold snap in many parts of the country could create a reversal in the next set of numbers.
So says Mark Obrinsky, chief economist for the National Multi Housing Council. He expected to see December housing starts, released on Thursday, to be higher than usual. Starts of multifamily housing jumped 42%, according to the Commerce Department.
Truth is, the underlying story in multifamily housing is that markets around the country are starting to normalize, industry observers say.
The craze of condo construction is coming to an end. Renters aren't fleeing apartments to dive into homeownership as they had been in previous years. Rents are rising modestly, and are predicted this year to rise at, or a bit higher than, the rate of inflation.
In fact, many say that we're several years away from the real sea change in multifamily housing. When large numbers of echo boomers, children of the baby boomers, move out of the dorms and into their first apartments, more supply of rental units may be needed. Around the same time, their parents may be interested in downsizing from a house to a condo.
A demographic trend like that could create a genuine spike in building, one that lasts beyond a warm holiday season."
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