The Census Bureau, in conjunction with the Department of Housing and Urban Development (HUD), released its monthly new residential construction report for April, 2018. The report shows a drop in permits and construction starts for multifamily housing but an increase in completions.
This month, the Census Bureau modified the formula under which they make seasonal adjustments to the data reported. As a consequence, they have re-stated all of the permits, starts and completions numbers reported for the last 5 years. The observations made in this report are based on the revised numbers.
Permits are down
After a strong performance last month, permits for multifamily housing were down slightly in April, falling 6.3 percent. However, permits were still up 7.4 percent from April, 2017.
As shown below, permitting activity for multifamily housing dropped significantly in most of the country. New permits were down 49 percent in the Northeast, 14 percent in the Midwest and 22 percent in the West. Only a strong 29 percent increase in the South, already the region of the country with the most multifamily housing construction activity, kept the results from being dire. When comparing the results for April to those from a year earlier, the pattern was the same. Permitting activity in the South was up strongly, rising 52 percent, while the rest of the country lagged.
Multifamily housing construction starts are down
As shown below, multifamily housing construction starts in April fell 11 percent from March, although they were up 18 percent from April, 2017.
The report on construction starts for multifamily housing was almost a mirror image of that from last month. While, in March, the Midwest was the only region that showed a drop in starts from a month earlier, in April it was the only region that showed an increase. In the Midwest, starts were up 29 percent while they were down 6.5 percent in the Northeast, 20 percent in the South and 15 percent in the West.
On a year over year basis, starts for multifamily housing units were down in the Midwest, although they rose by 52 percent in the Northeast and by around 28 percent in the South and West.
Completions rebound
Completions of multifamily housing units were up 18 percent in April from the month before, reaching a very strong level of 437,000 units at an annual rate. On a year over year basis, completions of multifamily housing units rose 37 percent.
Compared to the month before, completions for multifamily housing units were up strongly in the Midwest and South, offsetting declines in the Northeast and West. On a year over year basis, completions were up in all regions of the country.
All data quoted are based on seasonally adjusted results and are subject to revision.
