The Census Bureau’s new residential construction report for September was the reverse of last month’s report with multifamily housing construction permits and completions rising. Starts fell after moving sharply higher last month, but starts still outpaced completions for the month.
The report also stated that single-family permits fell 3 percent, starts fell 5 percent and completions rose 3 percent month-over-month.
Multifamily housing permits higher
The number of permits issued for buildings with 5 or more units in September was reported to be 571,000 units on a seasonally adjusted, annualized basis. This was up 8 percent (49,000 units) from August’s revised (+24,000 units) figure. September permits were up 25 percent from the level recorded in September 2021 and were up 4 percent from the trailing 12-month average.
In addition, 48,000 permits were issued in September for units in buildings with 2 to 4 units. This was up 1,000 units from the level for August, which was not revised in this report. September permits for units in buildings with 2 to 4 units were unchanged from the year-ago level but were 10 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 September was down 1 percent from the level in August but was 11 percent higher than the level of September 2021. Permit issuance history is shown in the first chart, below. The three-month weighted moving average for permits came it at 686,000 units.
On a month over month basis, the three-month weighted moving average for multifamily permit issuance was up 7 percent in the Midwest and 1 percent in the West. Issuance was down 1 percent in the South and 15 percent in the Northeast.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 16 percent in the South, 10 percent in the Midwest and 9 percent in the West. Issuance fell 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 fall
The preliminary September figure for multifamily housing starts in buildings with 5 or more units was 530,000 units on a seasonally adjusted, annualized basis. This was reported to be down 13 percent (80,000 units) from the revised figure (-1,000 units) for August.
Compared to the level of September 2021, multifamily housing starts in buildings with 5 or more units were up 17 percent. The reported starts figure was 3 percent higher than the trailing 12-month average and 36 percent higher than the monthly average from 2019.
Multifamily housing construction starts (two or more units per building) in September were down 1 percent from their August level for the country as-a-whole, based on three-month weighted moving averages. Starts were up 16 percent in the West and 9 percent in the Midwest. Starts fell 2 percent in the Northeast and 11 percent in the South from the levels of the prior month.
The three-month weighted moving average of starts was up 20 percent for the country-as-a-whole on a year-over-year basis. Compared to September 2021, starts were up 45 percent in the Northeast, 23 percent in the South and 16 percent in the West. Starts fell 2 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 September multifamily housing unit completions figure in buildings with 5 or more units per building was 376,000 units on a seasonally adjusted, annualized basis. This was reported to be up 17 percent (54,000 units) from August’s revised (+4,000 units) figure.
Compared to September 2021, multifamily housing completions in buildings with 5 or more units per building were up 33 percent. Compared to the trailing 12-month average, completions were up 12 percent and compared to the monthly average for 2019, completions were up 9 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were up 1 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving averages of completions were up 43 percent in the Northeast and 5 percent in the West. However, completions were down 6 percent in the South, and 16 percent in the Midwest. The South region accounted for 35 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 up 10 percent nationally. Completions were up 38 percent in the West, 28 percent in the Northeast and 21 percent in the Midwest. Completions fell 14 percent in the South.
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 was up again in September. Census reported that there were 893,000 units under construction in buildings with 5 or more units per building on a seasonally adjusted annualized basis. This is up by 17,000 units from the revised (+3,000 units) level of the month before. It is 27 percent, or 183,000 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.
