How Much are Multifamily Starts Increasing?

According to the latest data release from the U.S. Census Bureau and the Department of Housing and Urban Development, the seasonally adjusted annual rate (SAAR) for multifamily starts increased 14.3% from March to April and 23.3% from the annual rate last April to 529,000 units. But seasonally adjusting and annualizing a monthly figure based on a survey of builders in order to make monthly comparisons can result in some erratic swings in the data.

A more accurate picture can be drawn from a 12-month moving sum of monthly starts data that is not seasonally adjusted. From the same source, multifamily starts for the year-ending April totaled 424,600 units. That put the increase from March at 2% instead of 14.3% and the April to April change at 20.3%. That’s still a significant increase from one year ago, but not as erratic month to month. The difference in the seasonally adjusted April figure of 529,000 units and the 12-month total of not seasonally adjusted starts of 424,600 units is almost 20%.

However, one useful purpose of the seasonally adjusted annualized figure is it often signals a turn in trends more quickly than the unadjusted data. The adjusted starts series shows a trough as far back as March 2024 while the not seasonally adjusted annual series has multifamily starts troughing almost one year later in February 2025. Both data series are extremely useful to real estate economists and industry watchers but require caution in interpretation.

Residential building permit data is a more robust survey of thousands of permit-issuing places around the country and somewhat less erratic month to month. April’s annualized multifamily permit total was 514,000 units, up 22.7% from March and 11.5% for the year. The not seasonally adjusted annual total for multifamily permits was 480,000 units in April, up 1.2% from March and 10.7% from last April.

Meanwhile, single-family construction continues to essentially skate sideways as elevated mortgage rates, building costs and economic uncertainty hamper national homebuilding efforts. Annualized single-family starts fell 9% from March and 2.4% from one year ago to 930,000 units. Single-family permitting dipped 2.6% for the month and 5.5% for the year to 872,000 units, close to the 12-month average of 890,000 units.

Combined with the small plex category, total residential starts decreased 2.8% for the month but were up 4.6% for the year to 1.465 million units, while total residential permitting increased 5.8% for the month and were essentially unchanged for the year to 1.442 million units.

Multifamily completions were up 6.4% from last April and were up 16.5% for the month at 529,000 units. Meanwhile, single-family completions fell 7% from last April to 903,000 units and were down 1% from March.

Despite increasing starts, the SAAR for multifamily units under construction decreased 9.8% from last April to 670,000 units but was up 0.4% for the month. Single-family units under construction were down 7% for the year but unchanged from March at 588,000 units.

Compared to one year ago, the annual rate for multifamily permitting increased in three of the four regions, led by the Midwest (up 64.1% to 103,000 units), the Northeast (up 30.4% to 74,000 units) and the South region (up 5.3% to 224,000 units). The West region saw a decrease of 12.2% in annual multifamily permitting to 113,000 units in April. Compared to the previous month, permitting was up in the same three regions and down in the West.

Annualized multifamily starts increased sharply in the West region (up 192.8% to 163,000 units) and were up 22.2% in the Northeast region to 127,000 units. The South region’s multifamily starts decreased 14.7% to 174,000 units, while the Midwest region saw starts unchanged at 67,000 units. Compared to March’s SAAR, starts were up in the West, Northeast and Midwest regions and down in the South region.