The Census Bureau’s new residential construction report for March stated that the number of multifamily permits issued, starts and completions all fell from last month’s high levels. Once again, there were more starts than completions so that the number of multifamily units under construction rose to another new high.
The report on single-family housing construction was also positive. On a seasonally adjusted basis, single family permits rose 4 percent, starts rose 3 percent and completions rose 2 percent. The number of single-family units under construction fell 17,000 to 716,000 units.
Multifamily housing permits reverse last month’s gains
The number of permits issued for buildings with 5 or more units in March was reported to be 543,000 units on a seasonally adjusted, annualized basis. This was down 24 percent (174,000 units) from February’s revised figure. March permits were down 7 percent from the level recorded in March 2022 and were down 13 percent from the trailing 12-month average.
In addition, 52,000 permits were issued in March for units in buildings with 2 to 4 units. This was up 5,000 units from the level for February. March permits for units in buildings with 2 to 4 units were down 7 percent from the year-ago level and were down 13 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 March was down 5 percent from the level in February and was down 4 percent from the level of March 2022. The three-month weighted moving average for permits came it at 655,000 units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was up 27 percent in the Northeast and 2 percent in the Midwest. Permit issuance fell 8 percent in the West and 10 percent in the South.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 15 percent in the South. Permit issuance fell 8 percent in the West, 19 percent in the Midwest and 32 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 drop
The preliminary March figure for multifamily housing starts in buildings with 5 or more units was 542,000 units on a seasonally adjusted, annualized basis. This was reported to be down 7 percent (39,000 units) from the revised figure (-27,000 units) for February.
Compared to the level of March 2022, multifamily housing starts in buildings with 5 or more units were up 6 percent. The reported starts figure was 1 percent higher than the trailing 12-month average and was 39 percent higher than the monthly average from 2019.
Multifamily housing construction starts (two or more units per building) in March were up 3 percent from their February level for the country as-a-whole, based on three-month weighted moving averages. Starts were up 46 percent in the Northeast and 11 percent in the South from the levels of the prior month. Starts fell 13 percent in the West and 23 percent in the Midwest.
The three-month weighted moving average of starts was up 5 percent for the country-as-a-whole on a year-over-year basis. Compared to March 2022, starts were up 26 percent in the West and 21 percent in the South. Starts fell 25 percent in the Northeast and 39 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 March multifamily housing unit completions figure in buildings with 5 or more units per building was 484,000 units on a seasonally adjusted, annualized basis. This was reported to be down 7 percent (37,000 units) from February’s revised (+12,000 units) figure.
Compared to March 2022, multifamily housing completions in buildings with 5 or more units per building were up 60 percent. Compared to the trailing 12-month average, completions were up 28 percent and compared to the monthly average for 2019, completions were up 40 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were up 8 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving averages of completions was up 33 percent in the West, 11 percent in the Midwest and fractionally in the Northeast. Completions were down 7 percent in the South.
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 55 percent nationally. Completions were up 146 percent in the West, 61 percent in the Midwest, 26 percent in the Northeast and 22 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 March. The number of units under construction has been flat or higher every month since February 2020. Census reported that there were 941,000 units under construction in buildings with 5 or more units per building on a seasonally adjusted annualized basis. This was reported to be up by 2,000 units from the level of the month before, but the last month’s level was revised downward by 2,000 units so units under construction is unchanged from last month’s preliminary figure. It is 17 percent, or 138,000 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.
