- Multifamily permits dropped 16.8% YoY in August, despite an 8.3% MoM increase from July.
- The U.S. West led the decline with a 42% plunge in multifamily permits, followed by the Northeast and Midwest.
- Single-family housing saw a different trend, with annual growth in permits, indicating diverging in residential construction dynamics.
Multifamily construction permits fell by 16.8% YoY across all U.S. Census regions in August, according to RealPage Analytics’ analysis of new census data.
Despite an 8.3% bump in multifamily permits compared to July, the annual data shows a sharp decline. Meanwhile, multifamily deliveries surged, reaching their highest level in 50 years, as reported by GlobeSt.
By The Numbers
The U.S. West saw the steepest drop in annualized multifamily permitting, dropping by 42%, followed by the Northeast at 22.4%, and the Midwest at 9.5%.
Meanwhile, the South saw the smallest decrease, with permits down just 1.4% compared to August 2023. These declines were particularly evident in major multifamily markets.
Of the top 10 multifamily permitting markets, only New York City saw an annual increase, with 23% more units permitted. In contrast, cities like Dallas, Houston, and Atlanta faced significant drops.
Dallas saw the largest reduction, with 10.64K fewer permits, closely followed by Houston with 10.44K fewer permits, and Atlanta with 6.24K fewer units. Other markets like Los Angeles, Washington, D.C., and Raleigh/Durham also reported notable declines. Collectively, the 140.59K permits issued across the top 10 metros was 23% less than the year before.
Despite the overall decline, some markets bucked the trend. The Big Apple aside, cities like Fort Worth, Greensboro/Winston-Salem, Asheville, Omaha, and San Diego also reported more multifamily permitting this year.
Half-Century High
Interestingly, while overall multifamily permits fell, multifamily completions surged. Over the past 12 months, 740K units were completed—the highest number recorded in 50 years, and up 36.5% in August from July’s adjusted total (and nearly 80% above August 2023’s completions).
Despite the surge in deliveries, multifamily starts fell by over 6% to 330K units, while the number of units under construction also dropped to 850K.
Meanwhile, single-family starts shot up 15.8% from July to August and were up 5.2% YoY, indicating sustained growth. While single-family completions were down 5.6% for the month, they were also up 8.4% YoY, reaching 1.029M units.
The number of single-family units under construction slipped 0.3% from July, while annual figures were still down by 5.2%.
What’s Next
The future of multifamily permitting will largely depend on broader economic conditions, including interest rates, labor availability, and material costs.
The recent surge in completions shows that projects already underway are coming to fruition, but the decline in new permits could indicate slower growth in multifamily supply ahead.
The single-family market also appears to be benefitting from lower mortgage rates, driving demand for new homes.
