The Census Bureau, in conjunction with the Department of Housing and Urban Development (HUD), released its monthly new residential construction report for May, 2018. The strength in multifamily housing starts was the brightest part of the report.
Permits soften, or not
Permits for buildings with 5 or more units were down from the very high rate recorded in April, dropping 14 percent month-over-month. However, permits were up from a year earlier, rising 9.1 percent from May, 2017.
Permitting activity for housing with multiple units was up on a year-over-year basis in all regions of the country. The number of permits issued rose from as much as 27 percent in the Midwest to as little as 3.2 percent in the South. On a month over-month-basis, permits increased by 77 percent in the Northeast from an unusually weak level in April. Permits fell by 34 percent in the South from an unusually high level in April. In absolute terms, the highest numbers of permits were again issued in the South and West as shown below.
Multifamily housing construction starts are strong
Construction starts for buildings with 5 or more units were up 11.3 percent from the April, 2018 number. Construction starts in May for buildings with 5 or more units were up 27 percent from a year earlier.
Multifamily housing starts were up from April, 2018, in the Midwest and South but were down in the Northeast and West. The rise in housing starts in the Midwest was 96 percent month-over-month with starts in May more than doubling the average monthly rate of the prior 12 months. Starts in the Northeast were down 39 percent after a string of four relatively strong months.
Starts by region for the last 12 months shaped up as seen below.
Completions are mixed
Completions of multifamily housing were down 14 percent from April, 2018. On a year-over-year basis, completions of buildings with 5 or more units was up, rising 8 percent.
Completions for housing with multiple units were down in the Northeast and Midwest on a month-over-month basis. Performance in both regions suffered by comparison to very strong results in April. Completions were up in all regions of the country on a year-over-year basis except for the Northeast where they were down 41 percent.
Completions by region for the past year are shown in the chart below.
All data quoted are based on seasonally adjusted results and are subject to revision.