The Census Bureau’s new residential construction report for July stated that the number of multifamily permits issued, starts and unit completions were all down from the levels reported last month. The number of multifamily units under construction rose to another new high.
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits rose 1.3 percent, starts rose 6.7 percent, while completions rose 1.3 percent. The reported number of single-family units under construction fell 5,000 to 678,000 units.
Multifamily housing permits lower
The number of permits issued for buildings with 5 or more units in July was reported to be 464,000 units on a seasonally adjusted, annualized basis. This was down 0.6 percent (1,000 units) from June’s revised (-2,000 units) figure. July permits were down 32.2 percent from the level recorded in July 2022 and were also down 21.2 percent from the trailing 12-month average.
In addition, 48,000 permits were issued in July for units in buildings with 2 to 4 units. This was down 4,000 units from the revised (+1,000 units) figure for June. July permits for units in buildings with 2 to 4 units were down 14.3 percent from the year-ago level and were down 9.3 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 weighted moving averages. This averaging helps smooth out the month-to-month variations in the data.
Nationally, the three-month weighted moving average for multifamily housing permits issued in July was down 4.1 percent from the level in June and was down 28.1 percent from the level of July 2022. The three-month weighted moving average for permits came it at 527,000 annualized units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was down in all regions of the country. Permit issuance fell 7.0 percent in the Midwest, 4.3 percent in the South, 3.3 percent in the West and 1.4 percent in the Northeast.
When compared to year-earlier levels, the three-month weighted moving average of multifamily housing permits issued was down 35 percent in the Northeast, 31 percent in the South, 25 percent in the West and 17 percent in the Midwest.
The following chart shows the three-month weighted moving averages of permits by region for the last 25 months.
Multifamily housing construction starts lower
The preliminary July figure for multifamily housing starts in buildings with 5 or more units was 460,000 units on a seasonally adjusted, annualized basis. This was reported to be unchanged from the revised (-22,000 units) figure for June. This is the third report in a row where the starts figure for the previous month was revised sharply lower.
Compared to the level of July 2022, multifamily housing starts in buildings with 5 or more units were up 0.4 percent. The reported starts figure was 12.9 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 July were down 4.6 percent from their June level for the country as-a-whole, based on three-month weighted moving averages. Starts were down 1.1 percent in the South, 2.3 percent in the West, 3.1 percent in the Northeast and 21 percent in the Midwest from the levels of the prior month.
The three-month weighted moving average of starts was down 2.2 percent for the country-as-a-whole on a year-over-year basis. Compared to July 2022, starts were up 14.2 percent in the South and 1.8 percent in the West. Starts fell 2.1 percent in the Midwest and 50 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 crater
The preliminary July multifamily housing unit completions figure in buildings with 5 or more units per building was 297,000 units on a seasonally adjusted, annualized basis. This was reported to be up down 39 percent (188,000 units) from June’s revised (+9,000 units) figure.
Compared to July 2022, multifamily housing completions in buildings with 5 or more units per building were down 23.3 percent. Compared to the trailing 12-month average, completions were down 30 percent and compared to the monthly average for 2019, completions were down 15 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were down 19 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving averages of completions was down 11 percent in the West, 17 percent in the South, 23 percent in the Midwest and 31 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 3.3 percent nationally. Completions were up 28 percent in the Northeast, 17 percent in the South and 13 percent in the West. Completions fell 43 percent in the Midwest.
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 July. Census reported that there were 986,000 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 9,000 units from the revised level of the month before. It is 15.9 percent, or 135,000 units, higher than the number of units under construction one year earlier.
All data quoted are based on seasonally adjusted results and are subject to revision.
