The new year looks to be a mixed pot of increases and decreases according to the multifamily housing forecast for 2022. This past October Fannie Mae’s housing forecasts projected higher multifamily housing starts over single-family homes within the following six months but also anticipated lower GDP growth and higher inflation.
Optimistic Multi-Family Starts
In 2021 multi-family starts were up 22 percent from the number of units started in 2020 at 474,000 units. 2022 forecasts 416,000 units and looks to be optimistic through at least the middle of next year.
Inflation Expected To Increase
According to the Consumer Price Index, it’s clear that inflation has risen since last spring and is expected to increase into 2022. Fannie Mae’s forecast in particular for 2022 inflation has risen 1.2 percent from August to October with percentages predicted to keep rising due to challenges within with supply chain which leaves one to wonder if multi-family starts will remain optimistic.
GDP growth for 2022 is now expected to be at 3.6 percent which is .2 percent down from last October’s forecast of 3.8. GDP growth for 2021 is expected to come in at 4.9 making 2022 look even more dyer. This stunted growth is attributed to the current supply problems the economy is facing.
Senior Living Unit Appeal
At the start of the pandemic, senior living units took a heavy hit but with Boomers seeking senior living spaces in the near future, this could take a shift positioning senior living units as those with greater appeal. Almost 34,000 senior housing units were under construction within the primary 31 markets as of the second quarter in 2021 according to NIC MAP. Data specialists from Claritas, Inc. estimate that 9.8 million people over the age of 75 live within these markets. With NIC MAP forecasting an increase of 13 percent growth over the next five years, senior living units are projected to be the most appealing to investors with the understanding of which markets will offer greater inventory for these units.