Multifamily Permits Declining from 2015

Written by Landlord Property Management Magazine on . Posted in Blog

Shared post from Axiometrics, IncTotal U.S. housing starts slowed in March after accelerating in February. Privately owned housing starts in March were at a seasonally adjusted annual rate (SAAR) of 1.089 million units, 8.8% below February’s revised estimate of 1.194 million according to the U.S. Census Bureau.

Total residential starts were 14.2% higher than the March 2015 rate of 954,000. The 764,000 single-family (SF) starts reported in March, on an annual basis, were down 9.2% from February, but up 22.6% from March 2015’s annual rate. The 312,000 multifamily starts were down 8.5% from the previous month’s annual rate, but increased just slightly (+0.4%) from March 2015.

Total residential permits from municipal and other authorities reached 1.086 million units in March on a SAAR basis, a 7.7% decrease from February’s annual rate but a 4.6% increase from the March 2015 figure. Annual permits for SF homes slipped 1.2% from February to 727,000, but increased 13.2% from March 2015. The annual rate for SF permits has exceeded 700,000 units for six consecutive months.

The 324,000 multifamily permits issued in the 12 months ending March represented a 12.4% decrease from March 2015’s annual rate of 370,000 units and were 20.6% below February’s annual rate. March’s annual rate was 28% below the 12-month average of 447,000 units (SAAR).

Housing Starts in U.S. Declined by 5.9% Amid February Snow
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 Other U.S. Census statistics of note:

  • Annual gains in total starts from March 2015-March 2016 were spread across all regions, despite slowing multifamily starts in the Midwest (-40.0%) and South (-10.4%) regions. Multifamily starts significantly increased in the Northeast (+21.4%) and the West (+47.4%).Mar16Cons_2-1.jpg
  • Annual single-family starts were down in all regions from February: -8.6% in the Northeast, -21.2% in the Midwest, -4.9% in the South and -9.1% in the West. But all regions increased from March 2015 rates: 20.5% in the Northeast, 41.4% in the Midwest, 17.5% in the South and 24.3% in the West.
  • Annual total residential permits increased from the March 2015 rates in the Midwest (+24.2%) and South (+11.3%), but the Northeast (- 21.7%) and West (-6.1%) declined because of slowdowns in multifamily permits. Annual single-family permits increased in all regions from March 2015. Compared to February’s SAAR, however, the West (-6.8%) and Midwest (-3.2%) declined, the Northeast saw no gain or loss and the South was up 1.2%.
  • A total of 1.061 million residential units were completed in the 12 months ending March 2016, a 31.6% increase from March 2015 and a 3.5% increase from February. SF completions were up 23.2% to 734,000 units for the year on an annual basis, while multifamily completions increased by 58.8% to 316,000 units from March 2015.

Metro Focus

The top 10 Metropolitan Statistical Areas for multifamily permitting for the trailing 12 months ending March 2016 were:

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Nine of last month’s top 10 metros for annual multifamily permits returned to the list again in March and in the same order. Nashville jumped from No. 12 in February to No. 8 in March. Denver dropped from No. 8 to No. 11 in March.

Nashville and Dallas were the only top 10 markets with increased annual multifamily permits from the previous month; the remainder of top 10 markets decreased by an average of 650 units. Compared to one year ago, New York’s increase in annual multifamily permits of more than 34,000 units (mostly attributable to tax credit law changes) still leads the rest of the top 10, but Dallas (+8,167), Nashville (+3,285) and Atlanta (+3,291) also had strong increases. Boston increased its annual total from last year by about 1,800 units permitted, while Houston (-6,770) and Seattle (-4,029) slowed their multifamily permitting pace considerably.

The total number of annual multifamily units permitted in the top 10 metros (178,199) was 28.5% higher than the total for the same 10 metros one year ago, but 2.1% less than February’s 12-month total (182,004). This month’s top-10 total is about the same as the total for the next 54 metros (178,595).

Within the current top 10 metros, annual multifamily permitting increased significantly from March 2015 in:

  • New York (+122%).
  • Nashville (+58%).
  • Dallas (+52%).
  • Atlanta (+37%).
  • Boston (+26%).

Annual multifamily permitting increased moderately from March 2015 in:

  • Washington, DC (+3%).

Annual multifamily permitting decreased from March 2015 in:

  • Los Angeles (-1%).
  • Austin (-4%).
  • Seattle (-27%).
  • Houston (-27%).

Access the latest permit trends tables in Excel format here.

Please contact us if you have any questions.

Jay Denton
Senior Vice President
KC Sanjay
Sr. Real Estate Economist
Chuck Ehmann
Real Estate Economist

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