The Census Bureau’s new residential construction report for January reported that the number of multifamily permits issued increased but that starts and completions both fell, matching last month’s pattern. Starts exceeded completions again leading the number of multifamily units under construction to rise to another new high.
The report on single-family housing construction was mixed. On a seasonally adjusted basis, single family permits fell 2 percent and starts fell 4 percent, but completions rose 4 percent month-over-month. The number of single-family units under construction fell 8,000 to 760,000 units.
Multifamily housing permits continue rebound
The number of permits issued for buildings with 5 or more units in January was reported to be 563,000 units on a seasonally adjusted, annualized basis. This was up 7 percent (37,000 units) from December’s revised (+5,000 units) figure. However, January permits were down 4 percent from the level recorded in January 2022 and were down 9 percent from the trailing 12-month average.
In addition, 58,000 permits were issued in January for units in buildings with 2 to 4 units. This was up 12,000 units from the revised (+1,000 units) level for December. January permits for units in buildings with 2 to 4 units were up 2 percent from the year-ago level and were up 11 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 January was up less than 1 percent from the level in December and was down 11 percent from the level of January 2022. The three-month weighted moving average for permits came it at 608,000 units.
On a month over month basis, the three-month weighted moving average for multifamily permit issuance was up 4 percent in the South but was down fractionally in the West, 4 percent in the Midwest and 9 percent in the Northeast.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 13 percent in the South but was down 17 percent in both the Midwest and the West and down 53 percent in the Northeast.
The following chart shows the three-month weighted moving averages of multifamily housing construction permits by region for the last 25 months.
Multifamily housing construction starts lower
The preliminary January figure for multifamily housing starts in buildings with 5 or more units was 457,000 units on a seasonally adjusted, annualized basis. This was reported to be down 5 percent (25,000 units) from the revised figure (+20,000 units) for December.
Compared to the level of January 2022, multifamily housing starts in buildings with 5 or more units were down 8 percent. The reported starts figure was 14 percent lower than the trailing 12-month average but was 18 percent higher than the monthly average from 2019.
Multifamily housing construction starts (two or more units per building) in January were down 8 percent from their December level for the country as-a-whole, based on three-month weighted moving averages. Starts were up 9 percent in the Northeast and 8 percent in the West but down 8 percent in the South and 40 percent in the Midwest from the levels of the prior month.
The three-month weighted moving average of starts was down 4 percent for the country-as-a-whole on a year-over-year basis. Compared to January 2022, starts were up 14 percent in the West and 1 percent in the Northeast. However, starts fell 8 percent in the South and 26 percent in the Midwest.
The following chart shows the three-month weighted moving average of multifamily housing construction starts by region for the last 25 months.
Multifamily housing completions fall
The preliminary January multifamily housing unit completions figure in buildings with 5 or more units per building was 349,000 units on a seasonally adjusted, annualized basis. This was reported to be down 9 percent (33,000 units) from December’s revised (-3,000 units) figure.
Compared to January 2022, multifamily housing completions in buildings with 5 or more units per building were up 14 percent. Compared to the trailing 12-month average, completions were down 2 percent and compared to the monthly average for 2019, completions were up 1 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were down 5 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving averages of completions was up 6 percent in the South but fell less than 1 percent in the West, 19 percent in the Midwest and 20 percent in the Northeast.
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 15 percent nationally. Completions were up 57 percent in the Northeast, 22 percent in the West and 16 percent in the Midwest. Completions fell 1 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 January. The number of units under construction has been flat or higher every month since January 2020. Census reported that there were 932,000 units under construction in buildings with 5 or more units per building on a seasonally adjusted annualized basis. This is up by 6,000 units from the level of the month before. It is 24 percent, or 182,000 units, higher than the number of units under construction one year earlier.
The high for multifamily units under construction reached during the boom of the 1970’s was 901,000 units in 1973.
All data quoted are based on seasonally adjusted results and are subject to revision.
