The Census Bureau’s new residential construction report stated that multifamily completions retreated from last month’s high. Multifamily starts also fell as multifamily permit issuance continued its long-term slide.
Multifamily housing permits lower
The number of permits issued for buildings with 5 or more units in September was reported to be 398,000 units on a seasonally adjusted, annualized basis. Permit issuance was down 10.8 percent from August’s revised (-5,000 units) figure. Permits were down 17.4 percent from their year-earlier level and were also down 11.1 percent from their trailing 12-month average.
In addition, 60,000 permits were issued in September for units in buildings with 2 to 4 units. This was up 3,000 units from the unchanged figure for August. September permits for units in buildings with 2 to 4 units were up 17.6 percent from the year-ago level and were up 14.1 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 September was down 3.7 percent from the level in August and was down 15.3 percent from the level of September 2023. The three-month weighted moving average for permits came in at 474,000 annualized units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was up 0.3 percent in the West. Permit issuance fell 5.1 percent in the Midwest, 5.0 percent in the Northeast and 4.6 percent in the South.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was down 28.7 percent in the West, 12.2 percent in the Northeast, 10.2 percent in the South and 9.7 percent in the Midwest.
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 construction starts down again
The preliminary September figure for multifamily housing starts in buildings with 5 or more units was 317,000 units on a seasonally adjusted, annualized basis. This was reported to be down 4.5 percent (15,000 units) from the revised (-1,000 units) figure for August. In addition, the July starts figure was revised higher by 19,000 units to 376,000 units.
Compared to the year-earlier level, multifamily housing starts in buildings with 5 or more units were down 15.7 percent. The reported starts figure was 10.7 percent lower than the trailing 12-month average.
Multifamily housing construction starts (two or more units per building) in September were down 5.7 percent from their August level for the country as-a-whole, based on three-month weighted moving averages. Starts rose 17.4 percent in the Northeast and 0.3 percent in the Midwest. Starts fell 10.1 percent in the South and 19.5 percent in the West.
The three-month weighted moving average of starts was down 11.1 percent for the country-as-a-whole on a year-over-year basis. Compared to year-earlier levels, starts were up 47.4 percent in the Northeast but down 7.9 percent in the Midwest, 12.9 percent in the South and 40.2 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 down from last month’s high
The preliminary September figure for multifamily housing unit completions in buildings with 5 or more units per building was 671,000 units on a seasonally adjusted, annualized basis. Completions were reported to be 8.7 percent (64,000 units) in September from the revised (-5,000 units) 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 41.9 percent. Compared to the trailing 12-month average, completions were up 23.9 percent.
For the country as-a-whole, multifamily completions (two or more units per building) were up 2.3 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving average of completions was up 46.8 percent in the Northeast and 26.1 percent in the West but down 7.0 percent in the South and 24.6 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 56.0 percent nationally. Completions were up 78.4 percent in the South, 65.0 percent in the Northeast 37.4 percent in the West and 15.2 percent in the Midwest.
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 continued its downward trend in September. Census reported that there were 825,000 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 30,000 units from the revised (+5,000 units) level of the month before. It is 16.8 percent, or 166,000 units, lower than the number of units under construction one year earlier.
Single-family permits and starts edge higher
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits rose 0.3 percent month-over-month but fell 1.2 percent year-over-year to 970,000 units. Starts rose 2.7 percent month-over-month and 5.5 percent year-over-year from last month’s revised (+8,000 units) level to 1,027,000 units. Completions were down from last month’s revised (-1,000 units) level, falling 2.7 percent month-over-month but rising 1.6 percent year-over-year to 1,000,000 units. The reported number of single-family units under construction rose 2,000 units from the revised (-2,000 units) level of the month before to 642,000 units.
All data quoted are based on seasonally adjusted results and are subject to revision.
