According to data from the Department of Commerce, housing starts fell more than expected in October. This was largely due to a slump in apartment construction, specifically a significant drop in multi-family units – a major source of revenue for property managers and investors across the U.S. While this last round of housing starts data hit a seven-month low, the setback is temporary.

Overall, the housing market is slowly but surely exiting its recovery phase and becoming more stable by the day. Whether you’re a property manager, builder or consumer, I’ve outlined what the data means to set your expectations about the not-so-distant future of the real estate market. 

Debunking the data

Despite multifamily starts suffering its biggest decrease in more than a year (25.1%), permits increased 4.1% - a sign that the housing market remains on solid ground. The surge in permits was led largely by an increase in applications for single-family homes, an investment for both home buyers and property managers.

In the past, multifamily housing has benefited from the recession and rising rent costs. As multifamily constructions slows down, we’ll see an increase in single-family housing, which led the increase in permits mentioned above. Single-family units authorized for building jumped 2.4% this month compared to the month prior – making this the highest rate since January 2008. This presents an abundance of investment and rental opportunities for both home owners and property managers. 

The future of the real estate market

Despite the recent drop in starts, property managers should remain optimistic about the future of the real estate market. Why? Seasonality—starts typically decrease in the winter time, so a seven-month low makes sense. When compared to housing starts data from the summer of 2015 and winter 2014, this trend rings true: starts decrease in advance of the winter season and increase as summer nears. Overall housing starts—including apartments and other multifamily units—fell 1.6% in November 2014, but spiked by 28.6% the following June.

Since the best leading indicator of a strong housing market is permits, builders should remain relatively upbeat since those numbers reached an all-time high. Building permits rose 30% year-over-year in June 2015 (an eight-year high at that time). Keep in mind, strong permit numbers correlate with a strong housing market. The fact that permits continue to increase each season signals the end of the housing recession and proves optimistic for the market’s future.

If past data trends are any indication, we’ll see next year’s housing starts pick-up in the spring. Stay positive, property managers – it will only go up from here.