The Census Bureau released its monthly new residential construction report for April 2021. It reported that permits, starts and completions all remained at high levels.
Multifamily housing construction permits remain strong
The number of permits issued for buildings with 5 or more units rose in April to 559,000 units on a seasonally adjusted, annualized basis. This was up 11 percent from March’s revised (down by 5,000 units) figure. April permits were up 44 percent from the pandemic-impacted level of April 2020. However, even compared to the trailing 12-month average, permits were up a robust 28 percent.
In addition, 52,000 permits were issued in April for units in buildings with 2 to 4 units. This was down 10 percent from the revised level of the previous month but was up 53 percent from the number of such permits issued in April 2020. Compared to the trailing 12-month average, permits for units in buildings with 2 to 4 units were up by 9 percent.
Regional data for multifamily housing is only reported for structures with two or more units. “Structures with 5 or more units” is not broken out as a separate category. Since the regional data is highly volatile and is frequently revised, it is examined here based on three-month moving averages. This averaging will tend to smooth out the variations in the data.
Nationally, the three-month weighted moving average for permits issued for multifamily housing in April was up 2 percent from the very strong level of March and was 37 percent higher than the level of April 2020. Permit issuance history is shown in the first chart, below. The three-month weighted moving average for permits came it at 589,000 units.
On a month over month basis, the three-month weighted moving average for permit issuance was up 6 percent in the South and 4 percent in the Midwest. It fell 4 percent in the West and 5 percent in the Northeast.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 9 percent in the South, but it was down 4 percent in the Midwest, 3 percent in the West and 2 percent in the Northeast.
The following chart shows the three-month weighted moving averages of permits by region for the last 25 months.
Multifamily housing construction starts rise
The preliminary April figure for multifamily housing starts in buildings with 5 or more units was 470,000 units on a seasonally adjusted, annualized basis. This is up 4 percent from the revised March figure, but only because that figure was revised downward by 25,000 units. Still, 470,000 units is 29 percent higher than the trailing 12-month average and is at least 20 percent above the monthly average of either 2019 or 2020. Compared to the shutdown month of April 2020, multifamily housing starts in buildings with 5 or more units were up 98 percent.
Multifamily housing construction starts (two or more units per building) in April were up 4 percent from their March level for the country as-a-whole, based on three-month weighted moving averages. Starts were up 10 percent in the Northeast, 6 percent in the West and 4 percent in the South. Starts fell 6 percent in the Midwest from the previous month.
The three-month weighted moving average of starts was up 34 percent for the country-as-a-whole on a year-over-year basis. Compared to April 2020, starts were up 138 percent in the Northeast, 80 percent in the West, 25 percent in the Midwest and 5 percent in the South.
The following chart shows the starts by region for the last 25 months.
Multifamily housing completions decline
Multifamily housing unit completions in buildings with 5 or more units per building were down 14 percent from March’s revised level despite that figure being revised downward by 11,000 units. The preliminary reading on April completions came in at 401,000 units on a seasonally adjusted, annualized basis. Compared to April 2020, multifamily housing completions in buildings with 5 or more units per building were up 27 percent. Compared to the trailing 12-month average, completions were also up, rising 9 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were up 4 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving averages of completions were up 20 percent in the Northeast, 9 percent in the Midwest and 2 percent in the South. Completions fell 4 percent in the West.
On a year-over-year basis, the three-month weighted moving average of completions in buildings with 2 or more units per building was up 23 percent nationally. Completions were up 104 percent in the Northeast, 30 percent in the Midwest and 23 percent in the South. Completions fell 6 percent in the West.
Completions by region for the past 25 months are shown in the chart below.
All data quoted are based on seasonally adjusted results and are subject to revision.
Starting in February 2021, the calculation of the moving average was changed to put more weight on the current month and progressively less weight on the two prior months. Previously, all three months were weighted equally in calculating the moving average.
