Purchase demand to support multifamily construction

The sharp drop in the rental absorption rate would, other things equal, be expected to weigh on multifamily housing starts. However, the recent shift away from cities will provide an opportunity for developers to focus more heavily on the for-sale market, which has been underserved in recent years. Indeed, over the past five years the number of multifamily units for sale has seen an even larger fall than single-family homes. That will prevent a large drop in multifamily starts over the next couple of years.