(Bloomberg) -- Builder completions of US multifamily housing units soared to a five-decade high in August, a development that will probably help ease pressure on rents.
An annualized 759,000 residential buildings with two or more units were completed last month, the most since July 1974, according to US Census Bureau data published Wednesday. The nearly 39% jump from a month earlier was more than accounted for by a near doubling of monthly completions in the South, to 502,000 units.
Over the last 12 months, completions of multifamily structures such as apartment buildings have also risen substantially in the West and Midwest — to the highest levels since the 1980s — while remaining little changed in the Northeast. The divergence highlights the regional character of the challenge of high rents, which have been most persistent in major Northeast metropolitan areas like New York City, Philadelphia and Boston.
“Multifamily completions should be near their peak based on the longer lag of about 18 months between starts and completions,” Nancy Vanden Houten, the US lead economist at Oxford Economics, said in a note. “Additions to the multifamily stock have eased some pressure on rents, although the increases in supply and associated rent relief have not been uniform across regions.”
Elevated rental costs helped fuel a higher-than-expected increase in the consumer price index in August.
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