The Census Bureau’s new residential construction report for October stated that the number of multifamily construction permits and starts were up from the levels reported last month. However, the number of multifamily unit completions fell. The changes to permits and starts were modest, particularly compared to the dramatic swings in the figures seen in recent reports.
The number of multifamily units under construction ticked up slightly from September’s level after two months of declines.
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits rose 0.5 percent, starts rose 0.2 percent, while completions fell 0.9 percent. The reported number of single-family units under construction fell 4,000 from the revised level of the month before to 669,000 units.
Multifamily housing permits rise modestly
The number of permits issued for buildings with 5 or more units in October was reported to be 469,000 units on a seasonally adjusted, annualized basis. This was up 2.2 percent (10,000 units) from September’s figure. October permits were down 27.8 percent from the level recorded in October 2022 and were also down 13.8 percent from the trailing 12-month average.
In addition, 50,000 permits were issued in October for units in buildings with 2 to 4 units. This was up 1,000 units from the figure for September. October permits for units in buildings with 2 to 4 units were down 9.1 percent from the year-ago level and were down 4.9 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 permits issued for multifamily housing in October was down 1.8 percent from the level in September and was down 25.7 percent from the level of October 2022. The three-month weighted moving average for permits came it at 528,000 annualized units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was up 7.3 percent in the Northeast and 1.8 percent in the South. Permit issuance fell 4.4 percent in the West and 14.5 percent in the Midwest.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was down 0.5 percent in the Northeast, 18.0 percent in the West, 31.0 percent in the South and 36.5 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 higher
The preliminary October figure for multifamily housing starts in buildings with 5 or more units was 382,000 units on a seasonally adjusted, annualized basis. This was reported to be up 18,000 units from the revised (-19,000 units) figure for September.
Compared to the year-earlier level, multifamily housing starts in buildings with 5 or more units were down 31.8 percent. The reported starts figure was 22.7 percent lower than the trailing 12-month average but was only 1.9 percent lower than the monthly average from 2019.
Multifamily housing construction starts (two or more units per building) in October were up 0.3 percent from their September level for the country as-a-whole, based on three-month weighted moving averages. Starts were up 55.7 percent in the Midwest but starts fell 3.4 percent in the West, 7.0 percent in the South and 37.0 percent in the Northeast from the levels of the month before.
The three-month weighted moving average of starts was down 33.0 percent for the country-as-a-whole on a year-over-year basis. Compared to October 2022, starts were up 9.5 percent in the Midwest but down 35.3 percent in the South, 42.4 percent in the West, and 57.0 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 fall
The preliminary October multifamily housing unit completions figure in buildings with 5 or more units per building was 408,000 units on a seasonally adjusted, annualized basis. This was reported to be down 12.6 percent (59,000 units) from September’s revised (+22,000 units) figure.
Compared to the year-earlier level, multifamily housing completions in buildings with 5 or more units per building were up 14.3 percent. Compared to the trailing 12-month average, completions were down 4.5 percent but compared to the monthly average for 2019, completions were up 17.5 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were up 1.7 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving average of completions was up 16.4 percent in the Midwest and 5.3 percent in the South. However, completions fell 1.9 percent in the West and 20.2 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 17.1 percent nationally. Completions were up 69.3 percent in the South and 21.8 percent in the Midwest. Completions fell 13.0 percent in the West and 24.3 percent in the Northeast.
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 reported to be under construction ticked higher in October. Census reported that there were 987,000 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 1,000 units from the level of the month before. It is 8.3 percent, or 76,000 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.
