The Census Bureau’s new residential construction report for December showed a rebounding multifamily housing construction business, with multifamily construction permits, starts and completions numbers all rising from the levels reported last month.
The number of multifamily units under construction fell in December even though November’s figure was revised lower. Census reports that the number of multifamily units under construction has fallen for 5 months in a row after peaking at 1,001,000 units in July.
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits rose 1.7 percent month-over-month and 32.9 percent year-over-year to 994,000 units. Starts fell 8.6 percent month-over-month while rising 15.8 percent year-over-year to 1,027,000 units. Completions rose 8.4 percent month-over-month and 6.1 percent year-over-year to 1,056,000 units. The reported number of single-family units under construction fell 8,000 from the revised level of the month before to 671,000 units.
Multifamily housing permits rise
The number of permits issued for buildings with 5 or more units in December was reported to be 449,000 units on a seasonally adjusted, annualized basis. This was up 1.4 percent (6,000 units) from November’s revised (+8,000 units) figure. December permits were down 26.6 percent from the level recorded in December 2022 and were also down 13.4 percent from the trailing 12-month average.
In addition, 52,000 permits were issued in December for units in buildings with 2 to 4 units. This was up 5,000 units from the revised (-2,000 units) figure for November. December permits for units in buildings with 2 to 4 units were up 6.1 percent from the year-ago level and were up 1.1 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 so that underlying trends are more visible.
Nationally, the three-month weighted moving average for permits issued for multifamily housing in December was down 0.8 percent from the level in November and was down 22.8 percent from the level of December 2022. The three-month weighted moving average for permits came it at 502,000 annualized units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was up 8.2 percent in the Midwest and 7.3 percent in the South. Permit issuance fell 0.7 percent in the Northeast and 16.0 percent in the West.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was down in all regions of the country. Permits fell 15.8 percent in the West, 24.7 percent in both the South and the Midwest, and 27.9 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 continue recovery
The preliminary December figure for multifamily housing starts in buildings with 5 or more units was 417,000 units on a seasonally adjusted, annualized basis. This was reported to be up 29,000 units from the revised (-16,000 units) figure for November.
Compared to the year-earlier level, multifamily housing starts in buildings with 5 or more units were down 9.5 percent. The reported starts figure was 9.8 percent lower than the trailing 12-month average.
Multifamily housing construction starts (two or more units per building) in December were up 4.4 percent from their November level for the country as-a-whole, based on three-month weighted moving averages. Starts rose 15.1 percent in the Northeast, 13.0 percent in the West and 1.8 percent in the South from the levels of the month before. Starts fell 8.6 percent in the Midwest.
The three-month weighted moving average of starts was down 22.5 percent for the country-as-a-whole on a year-over-year basis. Compared to December 2022, starts were down 13.2 percent in the Northeast, 20.4 percent in the South, 25.4 percent in the West, and 29.5 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 also higher
The preliminary December multifamily housing unit completions figure in buildings with 5 or more units per building was 509,000 units on a seasonally adjusted, annualized basis. This was reported to be up 11.1 percent (51,000 units) from November’s revised (-14,000 units) figure.
Compared to the year-earlier level, multifamily housing completions in buildings with 5 or more units per building were up 33.6 percent. Compared to the trailing 12-month average, completions were up 18.3 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were up 8.5 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving average of completions was up 26.1 percent in the Northeast, 9.4 percent in the West, 6.2 percent in the Midwest and 5.5 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 18.3 percent nationally. Completions were up 66.9 percent in the South, 9.8 percent in the Midwest and 0.2 percent in the West. Completions fell and 38.5 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 fell in December. Census reported that there were 971,000 units under construction in buildings with 5 or more units per building on a seasonally adjusted annualized basis. This was reported to be down by 8,000 units from the revised (-9,000 units) level of the month before. It is 7.4 percent, or 68,000 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.
