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The housing industry is feeling the negative effects from an increasing amount of families living in rental properties. The Commerce Department spoke today about recent findings in the industry. Overall, housing dropped in August after reaching its highest point in seven years, causing multifamily projects to head U.S. real estate.
Many businesses are impacted by the increase in multifamily projects, such as apartments and condominiums, across the board starting with construction. According to the Commerce Department, beginning home construction fell a little over 14 percent, which is the most since April 2013.
The department’s construction report also found that fewer projects are applying for permits as that dropped to 5.6 percent. Instead of focusing on building homes, many construction companies are developing more rental properties with an average of 349,000 multifamily structures started, the most since July 2006.
Although home building is down, construction companies remain confident that the U.S. housing industry will recover. In a Sept. 10 presentation, James Zeumer, vice president for investor relations, said, “We’ve been actually pretty pleased with the overall progress of the U.S. housing recovery.”
Some contributing factors for why families are heading into rentals instead of homes are a slower growth in wages and the struggle to qualify for mortgages. As a result, single-family properties declined from the previous month to 2.4 percent. However, some Americans are buying a home due to less expensive borrowing costs.
Although the future of housing industry is uncertain, there are signs that show more Americans may be able to buy a home. The job market has been improving with an average of 215,000 jobs added to the economy.