Multifamily Completions Continue Outpacing Starts

The pace of multifamily completions exceeded multifamily starts for the ninth consecutive month in April.

The seasonally adjusted annual rate (SAAR) for multifamily starts increased by 31.4% to 322,000 units from March’s unusually low rate, but was still down 32.9% from last April, according to the latest data release from the U.S. Census Bureau. Meanwhile, multifamily completions were reported at an annualized rate of 516,000 units, down 1.1% from last month but up 18.1% for the year.

Multifamily permitting was down 9.1% from last month and the SAAR of 408,000 units permitted was 23% less than last April.

The number of multifamily units under construction slipped 1.6% from March to 919,000 units, down 5.2% from last year. Additionally, the number of multifamily units authorized but not started was down 3.8% to 126,000 units in April, down 16% from one year ago.

Meanwhile, single-family starts were down just 0.4% from last month to 1.031 million units, but that was 17.7% greater than the year before. The annualized rate for single-family permitting also declined slightly for the month (-0.8%) but was 11.4% higher than last April.

Single-family completions were up 15.4% for the month and 13.6% for the year to 1.092 million units. The number of single-family units under construction declined 1% from March to 682,000 units and was down 2% from one year ago. Single-family units authorized but not started were up 1.4% for the month and year at 142,000 units.

Together with the small two-to-four unit figures, total residential permitting fell 3% from last month and was down 2% for the year to 1.44 million units. April’s large increase in annual multifamily starts brought the SAAR of total residential starts up 5.7% from last month to 1.36 million units, but that number was still down 0.6% from last year.

Compared to one year ago, the annual rate for multifamily permitting increased only in the small Northeast Census region (+38.6% to 79,000 units). Deep declines in annualized multifamily permitting occurred in the West (-51.4% to 71,000 units), Midwest (-38.2% to 34,000 units) and South (-17.6% to 224,000 units) regions. Compared to the previous month, permitting was down in the West and Midwest and up in the Northeast and South regions.

Multifamily starts decreased from last April in all Census regions, led by the Northeast (-78.6% to 13,000 units) and Midwest (-38.9% to 48,000 units). Declines were more moderate in the West (-28.6%% to 74,000 units) and South (-20.7% to 186,000 units) regions. Compared to March’s SAAR, starts were down in the West and Northeast and up sharply in the Midwest and South regions.

Metro-Level Multifamily Permitting

Nine of the top 10 markets from March’s list returned in April with the first five remaining in order.

New York remained the top multifamily permitting market in the 12-months-ending in April with 28,733 units permitted, down about 7% from last year but up about the same amount from March. Austin returned at #2 with 19,277 units permitted, about even for the month but down 2.3% for the year.

Phoenix remained in the #3 spot, permitting a total of 17,461 units for the year, also unchanged from March but about 3,500 units less than last April. Multifamily permitting continues to slow in Dallas with 15,455 units permitted, 7,909 units less than last year. That activity held Dallas in the #4 spot.

At #5, Houston is also slowing, dropping 14,401 units from the 12-month total last year to 13,252 units this year. Atlanta moved up one spot to #6, permitting 13,230 units for the year and increasing by 7% for the month.

Los Angeles slipped one spot to #7 with 12,582 units permitted, down 5.2% from March and falling 18.6% from last April. Washington, DC remained in the #8 spot with 12,400 units permitted, almost unchanged for the month but down 36.4% for the year.

Tampa moved onto the top 10 list this month at #9 with 9,843 units permitted, up 14.3% for the month (1,228 units), while Miami again ranked #10 with 9,417 units permitted, down 11.4% for the year.

All of the top 10 multifamily permitting markets decreased their annual totals from the year before and some saw pretty significant declines. Houston had the deepest decrease in annual multifamily permitting of the top 10 (-14,401 units), followed by Dallas (-7,909 units), Atlanta (-7,313 units), Washington, DC (-7,102 units) and Tampa (-4,371 units). Phoenix, Los Angeles, New York and Miami had significant declines in multifamily permitting as well. Austin’s annual decline was minor (-450 units).

Other major non-top 10 markets with significant declines in annual permitting include San Antonio (-7,650 units), Raleigh/Durham (-5,161 units), Portland, OR (-5,109 units), Minneapolis/St. Paul (-5,056 units), Seattle (-3,947 units), Chicago (-3,690 units) and Orlando (-3,518 units).

Major markets with significant year-over-year increases in annual multifamily permitting in the year-ending April were Greensboro/Winston-Salem (+3,799 units), San Diego (+3,597 units), Knoxville, TN (+1,255 units), Louisville/Jefferson County, KY (+1,136 units), Nashville (+1,074 units) and Fort Lauderdale (+1,009 units).

The annual total of multifamily permits issued in the top 10 metros – 151,650 – was about 25% less than the 203,060 issued in the previous 12 months and down about 2.5% from last month. The total number of permits issued in the top 10 metros was almost equal to the number of permits issued for the #11 through #34 ranked metros.

Below the metro level, nine of last month’s top 10 permit-issuing places returned to this month’s list with only the first three remaining in the same place and the rest changing places. The list of top individual permitting places (cities, towns, boroughs and unincorporated counties) generally include the principal city of some of the most active metro areas.

In April, the city of Austin remained in the #1 position with 10,116 units permitted, about the same as in March. The city of Los Angeles returned to the #2 spot in April with 9,305 units permitted, 598 less than last month. The city of Phoenix stayed in the #3 spot with 7,538 units permitted, just 20 units more than last month, while the borough of Brooklyn moved up one spot to #4, permitting 6,895 units.

The city of Atlanta moved up two spots to #5 with 5,856 units permitted, but that was still 184 units less than last month’s annual total. The city of San Diego jumped three spot to #6, permitting 5,696 units for the year and the city-county of Nashville-Davidson fell to the #7 spot with 5,647 units permitted for the year.

Mecklenburg County (Charlotte) permitted 5,633 units for the year to fall to #8. Unincorporated Travis County (Austin) moved up one spot to the #9 spot with 5,523 units permitted, while the city of Fort Worth moved into the #10 spot with 5,319 units permitted for the year.

While the city of Houston fell out of the top 10, Texas still accounted for the most individual permitting places in the top 20 with six cities or counties. Florida, California, North Carolina and New York each had at least two or more permitting places in the top 20 list.