Recent reports on new residential construction from the Census Bureau have been up and down in the number of multifamily starts reported. Last month’s report was up and this month’s report was down. This is despite the number of permits issued being relatively steady over the last year. The report also stated that multifamily completions continue at a high level.
Multifamily permits nearly steady over past year
The number of permits issued for buildings with 5 or more units in January was reported to be 427,000 units on a seasonally adjusted, annualized basis. Permit issuance was down 1.4 percent from December’s revised (-4,000 units) figure. Permits were up 0.2 percent from their year-earlier level but were down 0.9 percent from their trailing 12-month average.
In addition, 60,000 permits were issued in January for units in buildings with 2 to 4 units. This was up 7,000 units from the revised (-1,000 units) figure for December. January permits for units in buildings with 2 to 4 units were up 17.6 percent from the year-ago level and were up 11.6 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 January was up 0.3 percent from the level in December but was down 0.5 percent from the level of January 2024. The three-month weighted moving average for permits came in at 492,000 annualized units.
On a month-over-month basis, the three-month weighted moving average for multifamily permit issuance was up 5.8 percent in the South, and 3.2 percent in the Midwest. Permit issuance was down 2.4 percent in the Northeast and 10.7 percent in the West.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 8.6 percent in the Midwest, 4.6 percent in the South and 1.3 percent in the Northeast. Permit issuance fell 17.7 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 construction starts lower
The preliminary January figure for multifamily housing starts in buildings with 5 or more units was 355,000 units on a seasonally adjusted, annualized basis. Starts were reported to be down 11.0 percent (44,000 units) from the revised (-19,000 units) figure for December.
Compared to the year-earlier level, multifamily housing starts in buildings with 5 or more units were up 2.3 percent. The reported starts figure was 5.8 percent higher than the trailing 12-month average.
Multifamily housing construction starts (two or more units per building) in January were up 0.1 percent from their December level for the country as-a-whole, based on three-month weighted moving averages. Starts rose 28.8 percent in the West but fell 1.2 percent in the South, 9.1 percent in the Northeast and 20.2 percent in the Midwest.
The three-month weighted moving average of starts was down 7.9 percent for the country-as-a-whole on a year-over-year basis. Compared to year-earlier levels, starts were up 0.5 percent in the Northeast but down 1.1 percent in the Midwest, 8.2 percent in the South and 15.2 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 higher
The preliminary January figure for multifamily housing unit completions in buildings with 5 or more units per building was 652,000 units on a seasonally adjusted, annualized basis. Completions were reported to be up 10.1 percent (60,000 units) from the revised (+22,000 units) level of the month before. Over the last 6 months, completions have been running at an average annualized rate of 639,000 units.
Compared to the year-earlier level, multifamily housing completions in buildings with 5 or more units per building were up 11.8 percent. Compared to the trailing 12-month average, completions were up 10.3 percent.
For the country as-a-whole, multifamily completions (two or more units per building) were up 3.7 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving average of completions was up 20.0 percent in the Northeast, 5.9 percent in the Midwest and 2.6 percent in the West but down 1.2 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 14.3 percent nationally. Completions were up 93.1 percent in the Northeast, 42.9 percent in the West and 2.2 percent in the South. Completions fell 37.5 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 fell again this month. Census reported that there were 767,000 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 12,000 units from the revised (+6,000 units) level of the month before. It is 22.5 percent, or 218,000 units, lower than the number of units under construction one year earlier.
Single-family permits, starts and completions in balance
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits were unchanged month-over-month but fell 3.4 percent year-over-year to 996,000 units. Starts fell 8.4 percent month-over-month and 1.8 percent year-over-year from last month’s revised (+34,000 units) level to 993,000 units. Completions were up from last month’s revised (-37,000) level, rising 7.1 percent month-over-month and 8.9 percent year-over-year to 982,000 units. The reported number of single-family units under construction was down 0.5 percent from the revised (+3,000 units) level of the month before at 641,000 units.
All data quoted are based on seasonally adjusted results and are subject to revision.
