The Census Bureau released its monthly new residential construction report for June 2021. It reported that some multifamily housing construction results were down from recent highs, but they were still solid compared to historical trends.
Multifamily housing construction permits remain high
The number of permits issued for buildings with 5 or more units fell in June to 483,000 units on a seasonally adjusted, annualized basis. This was down 1.6 percent from May, which was adjusted downward by 3,000 units. June permits were up 19 percent from June 2020, and up 6 percent compared to the trailing 12-month average.
In addition, 52,000 permits were issued in June for units in buildings with 2 to 4 units. This was a decrease of 10 percent from the revised level for May (adjusted up by 1,000 units).
June permits for units in buildings with 2 to 4 units were up 27 percent year-over-year and up 3 percent compared to the trailing 12-month average.
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 frequently revised, it is examined here based on three-month moving averages. This averaging tend to smooth out the month-to-month variations in the data.
Nationally, the three-month weighted moving average for permits issued for multifamily housing in June was down 3 percent from the level in May, but was 27 percent higher than the level of June 2020. Permit issuance history is shown in the first chart, below. The three-month weighted moving average for permits came it at 548,000 units.
On a month-over-month basis, the three-month weighted moving average for permit issuance was up fractionally in the Midwest. It fell 2 percent in the South and 4 percent in both the Northeast and the West.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 41 percent in the West, 40 percent in the Northeast, 30 percent in the Midwest and 15 percent in the South.
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 June figure for multifamily housing starts in buildings with 5 or more units was 474,000 units (seasonally adjusted, annualized basis). This is up 7 percent from the revised figure for May, aided by that figure having been revised downward by 21,000 units (4.5 percent). April’s figure was also adjusted downward again in this report, falling 9,000 units on top of the 23,000-unit downward revision in last month’s report.
The preliminary starts figure for June is healthy. It is 13 percent higher than the trailing 12-month average and is 21 percent higher than the average monthly level from 2019. It is 31 percent higher than the level in June 2020.
Multifamily housing construction starts (two or more units per building) in June were up 3 percent from their May level for the country as a whole, based on three-month weighted moving averages. Starts were up 19 percent in the Midwest, 16 percent in the West and less than 1 percent in the South. Starts fell 23 percent in the Northeast from the previous month.
The three-month weighted moving average of starts was up 41 percent for the country-as-a-whole on a year-over-year basis. Compared to June 2020, starts were up 63 percent in the Northeast, 45 percent in the South, 44 percent in the West and 11 percent in the Midwest.
The following chart shows the starts by region for the last 25 months.
Multifamily housing completions higher
The preliminary June multifamily housing unit completions figure (buildings with 5 or more units per building) was 416,000 units on a seasonally adjusted, annualized basis. This was up 10 percent from May’s revised figure, which was adjusted downward by 9,000 units
Compared to June 2020, multifamily housing completions in buildings with 5 or more units per building were up 34 percent. Compared to the trailing 12-month average, completions were also up, rising 10 percent. Completions were up 20 percent from the average monthly level in 2019 and up 15 percent from the average monthly level in 2020.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were down less than one percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving averages of completions were up 18 percent in the Northeast, 5 percent in the West and 4 percent in the South. Completions fell 30 percent in the Midwest.
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 25 percent nationally. Completions were up 57 in the Northeast, 49 percent in the South and 2 percent in the Northeast. Completions fell 18 percent in the Midwest.
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 place 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.
