The Census Bureau’s new residential construction report stated that multifamily permits and completions were down sharply in July after popping higher in June. However, multifamily starts were up slightly from the preliminary level reported last month. The number of multifamily units under construction extended its downward trend as completions continue to outpace starts.
Multifamily housing permits fall again after last month’s uptick
The number of permits issued for buildings with 5 or more units in July was reported to be 408,000 units on a seasonally adjusted, annualized basis. Permit issuance was down 12.4 percent (58,000 units) from June’s revised (+6,000 units) figure. July permits were down 18.2 percent from their year-earlier level and were also down 11.9 percent from their trailing 12-month average.
In addition, 50,000 permits were issued in July for units in buildings with 2 to 4 units. This was up 1,000 units from the revised (-3,000) figure for June. July permits for units in buildings with 2 to 4 units were up 2.0 percent from the year-ago level and were also up 2.0 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 July was down 1.6 percent from the level in June but was down 15.1 percent from the level of July 2023. The three-month weighted moving average for permits came in at 475,000 annualized units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was up 5.7 percent in the Northeast. Permit issuance fell 0.8 percent in the West, 0.9 percent in the Midwest and 4.3 percent in the South.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was down 10.0 percent in the Northeast, 11.5 percent in the Midwest, 13.6 percent in the South and 22.4 percent in the West.
The following chart shows the three-month weighted moving averages of permits by region for the last 37 months. It also shows the un-averaged total number of multifamily permits issued for the country as-a-whole.
Multifamily starts higher on revisions to last month’s data
The preliminary July figure for multifamily housing starts in buildings with 5 or more units was 363,000 units on a seasonally adjusted, annualized basis. This was reported to be up 11.7 percent (38,000 units) from the sharply revised (-35,000 units) figure for June.
Compared to the year-earlier level, multifamily starts in buildings with 5 or more units were down 21.8 percent. The reported starts figure was 0.3 percent lower than the trailing 12-month average.
Multifamily starts (two or more units per building) in July were up 8.0 percent from their June level for the country as-a-whole, based on three-month weighted moving averages. Starts rose 95.3 percent in the Northeast and 4.9 percent in the South. Starts fell 8.2 percent in the Midwest and 16.4 percent in the West.
The three-month weighted moving average of starts was down 27.4 percent for the country-as-a-whole on a year-over-year basis. Compared to year-earlier levels, starts were up 3.9 percent in the Northeast but down 28.4 percent in the Midwest, 33.3 percent in the South and 48.4 percent in the West.
The following chart shows the three-month weighted moving average of starts by region for the last 37 months. It also shows the un-averaged total number of multifamily starts for the country as-a-whole.
Multifamily housing completions sharply lower despite revisions
The preliminary July figure for multifamily housing unit completions in buildings with 5 or more units per building was 473,000 units on a seasonally adjusted, annualized basis. Completions were reported to be down 153,000 units (24.4 percent) in July from the revised (-30,000) level of the month before. This is the second month in a row where the change in completions plus the revisions to the previous month was 177,000 or more units, although last month the change was to the upside while this month the change was to the downside.
Compared to the year-earlier level, multifamily housing completions in buildings with 5 or more units per building were up 49.2 percent. Compared to the trailing 12-month average, completions were down 4.6 percent.
For the country as-a-whole, multifamily completions (two or more units per building) were down 7.8 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving average of completions was up 6.0 percent in the West, but down 7.8 percent in the South, 17.2 percent in the Northeast and 18.9 percent in the Midwest.
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 34.0 percent nationally. Completions were up 81.8 percent in the Midwest, 56.0 percent in the West and 21.7 percent in the South. Completions fell 17.2 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. It also shows the un-averaged total number of multifamily completions for the country as-a-whole.
The number of multifamily units reported to be under construction fell again in July. Census reported that there were 870,000 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 13,000 units from the revised (+3,000 units) level of the month before. It is 13.3 percent, or 134,000 units, lower than the number of units under construction one year earlier.
Single-family activity softens
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits fell 0.1 percent month-over-month and 1.6 percent year-over-year to 938,000 units. Last month’s permits figure was revised higher by 5,000 units to 939,000 units on a seasonally adjusted annualized basis. Starts fell 14.1 percent month-over-month and 14.8 percent year-over-year to 851,000 units. Completions were up slightly from last month’s revised level, rising 0.5 percent month-over-month and 3.6 percent year-over-year to 1,054,000 units. The reported number of single-family units under construction fell 14,000 units from the revised level of the month before to 653,000 units.
All data quoted are based on seasonally adjusted results and are subject to revision.
