The Census Bureau’s new residential construction report for April stated that the number of multifamily construction permits issued and unit completions were down for the month while starts were unchanged from the level reported the month before. Once again, there were more starts than completions so that the number of multifamily units under construction rose to another new high.
With this report, the Census Bureau revised their seasonal adjustment factors, causing them to revise their reported data back to January 2017. Because of these revisions, comparisons of current results to the data reported last month will be less germane than usual.
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits rose 3 percent, the third monthly increase in a row. Starts also rose, gaining 2 percent, but completions fell 17 percent. The reported number of single-family units under construction fell 10,000 to 698,000 units. This is the lowest number of units under construction since July 2021.
Multifamily housing permits down again
The number of permits issued for buildings with 5 or more units in April was reported to be 502,000 units on a seasonally adjusted, annualized basis. This was down 10 percent (54,000 units) from March’s revised figure. April permits were down 23 percent from the level recorded in April 2022 and were down 20 percent from the trailing 12-month average.
In addition, 59,000 permits were issued in April for units in buildings with 2 to 4 units. This was up 7,000 units from the level for March. April permits for units in buildings with 2 to 4 units were up 2 percent from the year-ago level and were up 10 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 April was down 6 percent from the level in March and was down 15 percent from the level of April 2022. The three-month weighted moving average for permits came it at 598,000 units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was down 14 percent in the Midwest, 2 percent in the Northeast, 5 percent in the South and 1 percent in the West.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was down 35 percent in the Northeast, 25 percent in the Midwest, 9 percent in the West and 9 percent in the South.
The following chart shows the three-month weighted moving averages of permits by region for the last 25 months.
Multifamily housing construction starts higher
The preliminary April 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 up 5 percent (27,000 units) from the revised figure for March. However, it is unchanged from the preliminary figure for March reported last month.
Compared to the level of April 2022, multifamily housing starts in buildings with 5 or more units were down 12 percent. However, 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 April were up fractionally from their March level for the country as-a-whole, based on three-month weighted moving averages. Starts were up 35 percent in the Midwest, 2 percent in the South and 1 percent in the Northeast from the levels of the prior month. Starts fell 14 percent in the West.
The three-month weighted moving average of starts was down 5 percent for the country-as-a-whole on a year-over-year basis. Compared to April 2022, starts were up 4 percent in the South. Starts fell 5 percent in the West, 11 percent in the Midwest and 25 percent in the Northeast.
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 April multifamily housing unit completions figure in buildings with 5 or more units per building was 400,000 units on a seasonally adjusted, annualized basis. This was reported to be down 17 percent (84,000 units) from March’s figure.
Compared to April 2022, multifamily housing completions in buildings with 5 or more units per building were up 24 percent. Compared to the trailing 12-month average, completions were up 1 percent and compared to the monthly average for 2019, completions were up 15 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were down 7 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving average of completions was up 8 percent in the Midwest. Completions were down 2 percent in the South, 15 percent in the West and 17 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 42 percent nationally. Completions were up 117 percent in the West, 57 percent in the Midwest, 19 percent in the Northeast and 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 April. The number of units under construction has been flat or higher every month since March 2020. Census reported that there were 959,000 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 16,000 units from the level of the month before. It is 16 percent, or 132,000 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.
