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New forecast predicts increases in single-family housing, decreases in multifamily

by Julia Berger

New home starts are predicted to increase 3 percent to $765 billion, according the Dodge 2018 Construction Outlook. Total starts in 2017 are expected to climb 4 percent to $746 billion, according to Robert Murray, chief economist for Dodge Data & Analytics.

That’s a marked slowdown from recent years; starts increased 11 to 13 percent from 2012 to 2015 and last year creeped up 5 percent, he added.

“The U.S. construction industry has moved into a mature stage of expansion,” he said. “An important question entering 2017 was whether the construction industry had the potential for further expansion.”

Much of this growth is spurred by increases in single-family housing, according to the forecast, while multifamily housing is slowing down. Single-family starts are predicted to rise 9 percent in total value and 7 percent in units to 850,000. A number of factors are pushing growth in single-family housing, including employment growth and a surge in the number of older millennials who seek homes as they start families. Dodge notes that rebuilding efforts after Hurricanes Irma and Harvey also are big factors in growth.

Meanwhile, multifamily homes are expected to decrease 8 percent in total value and 11 percent in units to 425,000. Dodge found that multifamily housing appears to have peaked in 2016 due to big growth in large metropolitan areas.

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