Multifamily Housing Development Is Heading For A Bust

Last week the Commerce Department released December housing starts data showing a big increase in the headline numbers. These numbers represent a flawed, seasonally adjusted impression of reality. But they suffer from a bigger problem. They combine data from two fundamentally different industries, single family housing development and multifamily development. Single family constitutes the bulk of the market, with about 2/3 of the market. Even though multifamily is smaller, it sends important signals about the state of the economy and deserves a closer look on that basis.

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