The Census Bureau’s new residential construction report for June stated that multifamily permits, starts, and completions were all up from May’s depressed levels. In addition, revisions to May’s multifamily housing construction data were all to the upside, sometimes sharply so. However, the number of multifamily units under construction extended its downward trend as completions continue to outpace starts.
Multifamily housing permits rebound
The number of permits issued for buildings with 5 or more units in June was reported to be 460,000 units on a seasonally adjusted, annualized basis. Permit issuance was up 19.2 percent from May’s revised (+2,000 units) figure. June permits were down 6.5 percent from their year-earlier level and were also down 1.1 percent from the trailing 12-month average.
In addition, 52,000 permits were issued in June for units in buildings with 2 to 4 units. This was down 5,000 units from the revised (+2,000) figure for May. June permits for units in buildings with 2 to 4 units were down 5.5 percent from the year-ago level and were down 3.1 percent from their 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 June was up 4.7 percent from the level in May but was down 16.7 percent from the level of June 2023. The three-month weighted moving average for permits came in at 481,000 annualized units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was up 21.2 percent in the Midwest, 7.1 percent in the South and 5.5 percent in the West. Permit issuance fell 16.4 percent in the Northeast.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was down 12.0 percent in the South, 13.6 percent in the Midwest, 21.5 percent in the Northeast and 24.2 percent in the West.
The following chart shows the three-month weighted moving averages of permits by region for the last 37 months.
Multifamily housing construction starts stage a comeback
The preliminary June figure for multifamily housing starts in buildings with 5 or more units was 360,000 units on a seasonally adjusted, annualized basis. This was reported to be up 22.0 percent (65,000 units) from the revised (+17,000 units) figure for May.
Compared to the year-earlier level, multifamily housing starts in buildings with 5 or more units were down 23.4 percent. The reported starts figure was 4.1 percent lower than the trailing 12-month average.
Multifamily housing construction starts (two or more units per building) in June were up 11.2 percent from their May level for the country as-a-whole, based on three-month weighted moving averages. Starts rose 64.5 percent in the Midwest and 41.9 percent in the Northeast. Both of those regions had recorded unusually low levels of starts the month before. Starts rose 5.9 percent in the West but fell but fell 4.1 percent in the South.
The three-month weighted moving average of starts was down 33.1 percent for the country-as-a-whole on a year-over-year basis. Compared to year-earlier levels, starts were down 39.7 percent in the South, 35.2 percent in the West, 24.4 percent in the Midwest and 3.9 percent in the Northeast.
The following chart shows the three-month weighted moving average of starts by region for the last 37 months.
Multifamily housing completions revised higher
The preliminary June figure for multifamily housing unit completions in buildings with 5 or more units per building was 656,000 units on a seasonally adjusted, annualized basis. Completions were reported to be up 136,000 units (26.2 percent) in June from the revised (+41,000) level of the month before.
Compared to the year-earlier level, multifamily housing completions in buildings with 5 or more units per building were up 40.2 percent. Compared to the trailing 12-month average, completions were up 35.7 percent.
For the country as-a-whole, multifamily housing construction completions (two or more units per building) were up 12.6 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving average of completions was up 64.4 percent in the Midwest, 42.5 percent in the Northeast and 2.4 percent in the West. However, completions were down 1.1 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 26.2 percent nationally. Completions were up 106.0 percent in the Midwest, 35.2 percent in the West and 12.0 percent in the South. Completions fell 16.8 percent in the Northeast.
The three-month weighted moving average of completions by region for the past 37 months are shown in the chart below.
The number of multifamily units reported to be under construction fell again in June. Census reported that there were 880,000 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 15,000 units from the revised (-2,000 units) level of the month before. It is 11.4 percent, or 113,000 units, lower than the number of units under construction one year earlier.
Single-family continues to fade
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits fell 2.3 percent month-over-month and 1.3 percent year-over-year to 934,000 units. Last month’s permits figure was revised higher by 7,000 units to 956,000 units on a seasonally adjusted annualized basis. Starts fell 2.1 percent month-over-month but were up 5.4 percent year-over-year to 980,000 units. Completions were up from last month’s revised level, rising 1.8 percent month-over-month and 3.2 percent year-over-year to 1,037,000 units. The reported number of single-family units under construction fell 9,000 from the revised level of the month before to 668,000 units.
All data quoted are based on seasonally adjusted results and are subject to revision.
