Best Quarter for Multi-Family Missing Middle Construction in 17 Years
Originally Published by: NAHB — November 25, 2024
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The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties.
The multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has generally disappointed since the Great Recession. However, there was a noticeable uptick for this type of housing construction in the most recent data. For the third quarter of 2024, there were 6,000 2- to 4-unit housing unit construction starts. This is double the pace of construction from a year prior.
As a share of all multifamily production, 2- to 4-unit development was just above 6% of total multifamily development for the third quarter. However this is still lower than recent historic trends. From 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction. Construction of the missing middle has clearly lagged during the post-Great Recession period and will continue to do so without zoning reform focused on light-touch density. But recent data offer hope for additional housing supply for these kind of structures.
