Recent federal data is giving mild indications the multifamily construction market may be inching toward a modest bounceback.
Discussing recently released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, RealPage Senior Real Estate Economist Chuck Ehmann said information suggests a slight improvement in multifamily permits since early last year.
Adding the months of February and March does not provide enough data to make a definitive projection, but multifamily starts seem to be accelerating at a faster rate than permits. March starts hit a seasonally adjusted annual rate of 446,000 units, a 13.5% month-over-month increase and a jump of 9.6% year-over-year.
Permit data showed 427,000 units, a 5.3% drop from February, but a 23.5% increase for the year.
Multifamily permitting fell sharply in the South, dropping 28.9% YoY for a total of 178,000 units. The Northeast was up 36.6%, with 49,000 units. The West increased to 126,000 units, up 24.9%, and the Midwest rose 15.3%, or 76,000 units.
Multifamily starts were up sharply, reporting a gain of 226,000 units for an increase of 39.1%.
The pipeline, however, continues to thin. Multifamily units under construction dropped to 659,000 in March, a fall of 12% from February and 1.5% YoY. (Source)