U.S. Needs 4.3M More Apartments by 2035 to Address Demand, Deficit and Affordability
U.S. Needs 4.3M More Apartments by 2035 to Address Demand, Deficit and Affordability:
Amidst demographic shifts and lingering pandemic impacts on the population and broader economy, the U.S. faces a pressing need to build 4.3 million new apartments by 2035, according to a new study commissioned by the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA).
Key findings:
- Shortage of 600,000 apartment homes. The 4.3 million apartment homes needed include an existing 600,000 apartment home deficit because of underbuilding due in large part to the 2008 financial crisis.
- Loss of affordable units. The number of affordable units (those with rents less than $1,000 per month) declined by 4.7 million from 2015 to 2020.
- Homeownership. Apartment demand also factors in a projected 3.8% increase in the homeownership rate.
- Immigration. Immigration is a significant driver of apartment demand, and levels tapered before the pandemic has remained low. A reversal of this trend would significantly increase apartment demand.
- Texas, Florida, and California. These three states account for 40% of future demand and will require 1.5 million new apartments by 2035.
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