June 21, 2017
Three measures of multifamily housing construction—starts, permits and units under construction—fell in May. They confirm expectations of reduced levels of multifamily deliveries in the near future and alleviate some concern about overbuilding.

Multifamily Construction Starts Decline
On Friday, the U.S. Census Bureau reported a seasonally adjusted annual rate of 284,000 units (in the 5+ per building category throughout the U.S.). The May figure represented a 9.8% decline from April and a 25.7% decline year-over-year. Year-to-date, a total of 135,100 multifamily units have been started nationwide, a 5.4% decline from the same period a year ago.

Multifamily Permitting Activity Slows
Multifamily permitting activity also reflects moderation. Friday’s housing construction report included a seasonally adjusted annual total of 358,000 multifamily units that received permit approval. This total is down both from the prior month (-10.1%) and prior year (-13.1%). Year-to-date, permitted multifamily units totaled 150,900 units, a 4.4% decrease from the prior year.

Under-Construction Total Eases Slightly in May, But Up from Prior Year
May’s seasonally adjusted total of 602,000 multifamily units under construction was down slightly (-1.0%) from the prior month. The under-construction total has edged down for the past three months from 614,000 units in February—a level that likely was the cyclical high. However, on a year-over-year basis, the May total reflects a 5.6% gain.