The Census Bureau’s new residential construction report for October recorded slight declines in multifamily housing construction permits, starts and completions. However, none of the declines was more than 5 percent from the levels of prior month and all three measures were up year-over-year. Starts still outpaced completions for the month leading the number of units under construction to rise to record levels.
In single-family housing construction, the reported results continued the recent trend of declining activity. Single family permits fell 4 percent, starts fell 6 percent and completions fell 8 percent month-over-month.
Multifamily housing permits lower
The number of permits issued for buildings with 5 or more units in October was reported to be 633,000 units on a seasonally adjusted, annualized basis. This was down 2 percent (12,000 units) from September’s revised (+1,000 units) figure. October permits were up 11 percent from the level recorded in October 2021 and were up 0.5 percent from the trailing 12-month average.
In addition, 54,000 permits were issued in October for units in buildings with 2 to 4 units. This was up 5,000 units from the revised (+1,000) level for September. October permits for units in buildings with 2 to 4 units were up 4 percent from the year-ago level and were up 0.6 percent from 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 October was down 1 percent from the level in September but was 11 percent higher than the level of October 2021. Permit issuance history is shown in the first chart, below. The three-month weighted moving average for permits came it at 682,000 units.
On a month over month basis, the three-month weighted moving average for multifamily permit issuance was up 5 percent in the South and 3 percent in the Midwest. Issuance was down 7 percent in the West and 10 percent in the Northeast.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 26 percent in the South and 5 percent in the Midwest. Issuance fell 2 percent in the West and 6 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 up for the year
The preliminary October figure for multifamily housing starts in buildings with 5 or more units was 556,000 units on a seasonally adjusted, annualized basis. This was reported to be down 0.5 percent (3,000 units) from the revised figure (+29,000 units) for September.
Compared to the level of October 2021, multifamily housing starts in buildings with 5 or more units were up 17 percent. The reported starts figure was 7 percent higher than the trailing 12-month average and 27 percent higher than the monthly average from 2019.
Multifamily housing construction starts (two or more units per building) in October were up 2 percent from their September level for the country as-a-whole, based on three-month weighted moving averages. Starts were up 12 percent in the South, 7 percent in the Midwest and 5 percent in the West. Starts fell 28 percent in the Northeast from the level of the prior month.
The three-month weighted moving average of starts was up 21 percent for the country-as-a-whole on a year-over-year basis. Compared to October 2021, starts were up 39 percent in the South, 15 percent in the West and 7 percent in the Northeast. Starts fell 5 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 lower
The preliminary October multifamily housing unit completions figure in buildings with 5 or more units per building was 362,000 units on a seasonally adjusted, annualized basis. This was reported to be down 5 percent (19,000 units) from September’s revised (+5,000 units) figure.
Compared to October 2021, multifamily housing completions in buildings with 5 or more units per building were up 18 percent. Compared to the trailing 12-month average, completions were up 5 percent and compared to the monthly average for 2019, completions were up 5 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 was up 23 percent in the West and 2 percent in the South. However, completions were down 11 percent in the Northeast, and 22 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 18 percent nationally. Completions were up 97 percent in the West and 2 percent in the Midwest. Completions fell 1 percent in the Northeast and 6 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 October. Census reported that there were 910,000 units under construction in buildings with 5 or more units per building on a seasonally adjusted annualized basis. This is up by 18,000 units from the revised (-1,000 units) level of the month before. It is 26 percent, or 188,000 units, higher than the number of units under construction one year earlier. There have never been this many multifamily housing units under construction since records began in 1970, the previous high being 901,000 units in 1973.
All data quoted are based on seasonally adjusted results and are subject to revision.
