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But the numbers remain weak, even though mortgage rates are near record lows and home prices have fallen by a third since 2006.
Tighter lending standards are preventing many families from buying houses, and diminished prices on single-family homes have given the industry little reason to build more. Builders are also competing with foreclosures, which hold prices down.
Yet they have found a way to make money — by serving the rising demand for rental apartments.
"When you have a slowdown in home sales and a growth in population, there's a lot of pent-up demand for apartments," says Mark Dellonte, president of Love Funding, which provides loans for apartment construction across the country.
In July, Love Funding started work on a 130-unit apartment building in Bethesda, Md., near Washington, with a $60 million government loan. The builder says it expects every apartment to be occupied when the project is completed at the end of 2012.
Builders have a strong incentive: Rents are rising as people flock to apartments. The average rent has risen 2.4 percent this year to $1,004 a month, according to the real estate data firm Reis Inc. It rose 1 percent last year and fell 2.7 percent in 2009.
Between 2005 and 2010, including the Great Recession, 4 million American households became renters, according to Harvard's Joint Center for Housing Studies — 10 times what would be expected in a normal economy.
And if government population estimates hold true, at least 2 million households will become renters each year through 2020. That means 400,000 apartments will need to be built each year to keep up with demand.
"For a lot of reasons, many Americans, especially young people, don't want to buy a home anymore," says Dan McCue, research manager for Harvard's Housing Studies Center. "That means the renting population is going to keep growing, and builders are just starting to catch on."
Builders typically begin construction on single-family homes six months after getting a permit. With apartment projects, the lag time can exceed a year. That helps explain why the surge of apartment construction is happening now when rents have been rising for two years.