The Census Bureau’s new residential construction report for July showed multifamily housing construction permits and completions were both strong but that starts fell for the month.
In single-family housing construction, permits and starts were both well below year-earlier levels, falling 12 percent and 19 percent respectively, but completions remained relatively steady.
Rise in multifamily housing permits continues
The number of permits issued for buildings with 5 or more units in July was reported to be 693,000 units on a seasonally adjusted, annualized basis. This was up 3 percent (17,000 units) from June’s revised (+10,000 units) figure. July permits were up 26 percent from the level recorded in July 2021 and were up 13 percent over the trailing 12-month average.
In addition, 53,000 permits were issued in July for units in buildings with 2 to 4 units. This was up 1,000 units from the revised (-2,000 units) level for June. July permits for units in buildings with 2 to 4 units down 4 percent from the year-ago level and were 1 percent lower than 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 is frequently revised, it is examined here based on three-month moving averages. This averaging will 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 July was up 4 percent from the level in June and was 24 percent higher than the level of July 2021. Permit issuance history is shown in the first chart, below. The three-month weighted moving average for permits came it at 722,000 units.
On a month over month basis, the three-month weighted moving average for multifamily permit issuance was up 9 percent in the Northeast and 7 percent in the South. Permit issuance fell 1 percent in the West and 3 percent in the Midwest.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 39 percent in the South, 18 percent in the Northeast, 11 percent in the West and 10 percent in the Midwest.
The following chart shows the three-month weighted moving averages of permits by region for the last 25 months.
Multifamily housing construction starts soften
The preliminary July figure for multifamily housing starts in buildings with 5 or more units was 514,000 units on a seasonally adjusted, annualized basis. This was reported to be down 10 percent (57,000 units) from the revised figure (+3,000 units) for June.
Compared to the level of July 2021, multifamily housing starts in buildings with 5 or more units were up 17 percent. The reported starts figure was 2 percent higher than the trailing 12-month average and 32 percent higher than the monthly average from 2019.
Multifamily housing construction starts (two or more units per building) in July were down 3 percent from their June level for the country as-a-whole, based on three-month weighted moving averages. Starts were up 42 percent in the Northeast and 3 percent in the West. Starts fell 15 percent in the South and 26 percent in the Midwest from the levels of the prior month.
The three-month weighted moving average of starts was up 14 percent for the country-as-a-whole on a year-over-year basis. Compared to July 2021, starts were up 144 percent in the Northeast and 2 percent in the South. Starts fell 2 percent in the West and 7 percent in the Midwest.
The following chart shows the three-month weighted moving average of starts by region for the last 25 months.
Multifamily housing completions higher
The preliminary July multifamily housing unit completions figure in buildings with 5 or more units per building was 412,000 units on a seasonally adjusted, annualized basis. This was reported to be up 7 percent (26,000 units) from June’s revised (+20,000 units) figure.
Compared to July 2021, multifamily housing completions in buildings with 5 or more units per building were down 2 percent. Compared to the trailing 12-month average, completions were up 21 percent and compared to the monthly average for 2019, completions were up 19 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were up 6 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving averages of completions was up 96 percent in the Midwest. Completions were down 7 percent in the West, 8 percent in the South and 12 percent in the Northeast. The South region accounted for 43 percent of all completions.
On a year-over-year basis, the three-month weighted moving average of completions in buildings with 2 or more units per building was down 1 percent nationally. Completions were up 73 percent in the Midwest but fell 6 percent in the West, 16 percent in the South and 19 percent in the Northeast.
The three-month weighted moving average of completions by region for the past 25 months are shown in the chart below.
The number of multifamily units under construction continued to rise in July. Census reported that there were 846,000 units under construction in buildings with 5 or more units per building on a seasonally adjusted annualized basis. This is up by 7,000 units from the revised (-2,000 units) level of the month before. It is 25 percent, or 168,000 units, higher than the number of units under construction one year earlier. There have not been this many multifamily housing units under construction since 1973.
All data quoted are based on seasonally adjusted results and are subject to revision.
