The Census Bureau’s report on new residential construction stated that multifamily permits fell, multifamily starts rose and multifamily completions plunged. It also reported rising single family construction activity with increases in both starts and completions.
Multifamily permits decline
The number of permits issued for buildings with 5 or more units in February was reported to be 404,000 units on a seasonally adjusted, annualized basis. Permit issuance was down 4.3 percent from January’s revised (-5,000 units) figure. Permits were down 15.7 percent from their relatively strong showing in February 2024 and were down 6.2 percent from their trailing 12-month average.
In addition, 60,000 permits were issued in February for units in buildings with 2 to 4 units. This was the same figure as was reported last month but was up 3,000 units from the revised (-3,000 units) figure for January. February permits for units in buildings with 2 to 4 units were up 5.3 percent from the year-ago level and were up 10.6 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 February was down 3.1 percent from the level in January and was down 7.8 percent from the level of February 2024. The three-month weighted moving average for permits came in at 473,000 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 Midwest. Permit issuance was down 1.4 percent in the South, 12.1 percent in the West and 16.7 percent in the Northeast.
When compared to year-earlier levels, the three-month weighted moving average of permits issued was up 8.6 percent in the Midwest and 4.6 percent in the South. Permit issuance fell 17.4 percent in the West and 44.2 percent in the Northeast.
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 pop back up
The preliminary February figure for multifamily housing starts in buildings with 5 or more units was 370,000 units on a seasonally adjusted, annualized basis. Starts were reported to be up 12.1 percent (40,000 units) from the revised (-25,000 units) figure for January.
Compared to the year-earlier level, multifamily housing starts in buildings with 5 or more units were down 6.6 percent. The reported starts figure was 10.5 percent higher than the trailing 12-month average.
Multifamily housing construction starts (two or more units per building) in February were up 4.6 percent from their January level for the country as-a-whole, based on three-month weighted moving averages. Starts rose 28.1 percent in the West and 0.7 percent in the South but fell 6.3 percent in the Northeast and 10.7 percent in the Midwest.
The three-month weighted moving average of starts was down 5.3 percent for the country-as-a-whole on a year-over-year basis. Compared to year-earlier levels, starts were up 16.9 percent in the Northeast and 13.1 percent in the West but down 9.6 percent in the South and, 38.4 percent in the Midwest.
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 fall sharply
The preliminary February figure for multifamily housing unit completions in buildings with 5 or more units per building was 512,000 units on a seasonally adjusted, annualized basis. Completions were reported to be down 20.7 percent (134,000 units) from the revised (-6,000 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 down 15.8 percent. Completions were 13.9 percent below the trailing 12-month average.
For the country as-a-whole, multifamily completions (two or more units per building) were down 7.6 percent month-over-month, comparing three-month weighted moving averages. The three-month weighted moving average of completions was up 6.2 percent in the South but down 8.2 percent in the West, 29.3 percent in the Midwest and 29.6 percent in the Northeast.
On a year-over-year basis, the three-month weighted moving average of completions in buildings with 2 or more units per building was down 2.7 percent nationally. Completions were up 20.2 percent in the Northeast, 20.1 percent in the West and 0.1 percent in the South. Completions fell 52.0 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 under construction was reported to rise this month, a rare break in the string of declines from the peak of 1,004,000 units reported to be under construction in July 2023. Census reported that there were 754,000 units under construction in buildings with 5 or more units per building on a seasonally adjusted annualized basis. This was reported to be up by 2,000 units from the revised (+1,000 units) level of the month before. It is 21.0 percent, or 200,000 units, lower than the number of units under construction one year earlier.
Single-family completions and starts exceed 1 million units
The report on single-family housing construction showed that, on a seasonally adjusted basis, single family permits fell 0.2 percent month-over-month and fell 3.4 percent year-over-year to 992,000 units. Starts rose 11.4 percent month-over-month but fell 2.3 percent year-over-year from last month’s revised (+2,000 units) level to 1,108,000 units. Completions were up from last month’s revised (+13,000) level, rising 7.1 percent month-over-month but falling 1.0 percent year-over-year to 1,066,000 units. The reported number of single-family units under construction unchanged from the revised (-1,000 units) level of the month before at 640,000 units.
All data quoted are based on seasonally adjusted results and are subject to revision.
