Ignore the Roller Coaster: Multifamily Starts are Increasing Slowly

As suspected, survey data volatility and seasonal adjustments provided a roller coaster appearance to the annual multifamily starts data series reported in the latest release from the U.S. Census Bureau and the Department of Housing and Urban Development. Last month’s decline of 41.6% was followed by a 76.3% increase from May to June, or a jump from 291,000 units to 513,000 units.

A more telling trend appears in the rolling 12-month totals for not seasonally adjusted starts data. There we saw a 2.1% increase in annual starts from May to June to 428,900 units, continuing a slow upward recovery from the bottom of the last construction cycle.

Interestingly, the slope of the upward trend for not seasonally adjusted annual starts is different than last time, with an average month-to-month increase of 1.4% from January 2025 to June 2026 compared to an average month-to-month increase of 2% from March 2021 to November 2022.

The rate of monthly increase for not seasonally adjusted annual multifamily permitting is also lower than during the previous cycle, averaging 0.5% monthly growth to 473,800 units versus 1.9% monthly growth previously. The seasonally adjusted annual rate (SAAR) for multifamily permitting decreased 4.9% from May and 6.3% from last June to 445,000 units.

Meanwhile, single-family construction continued to slow with the June SAAR for single-family starts down 0.2% from May and 3.2% from last June to 895,000 units. Single-family permitting declined 2.4% for the month and was down 0.2% for the year to 871,000 units, below its 12-month average of 889,000 units.

With this month’s statistical surge in multifamily starts combined with the small plex category, total residential starts jumped 19% for the month and were up 3.5% for the year to 1.427 million units, while total residential permitting fell 3% for the month and were down for 2.3% for the year to 1.367 million units.

Multifamily completions were down 5.1% from last June and 3.5% for the month to 413,000 units. Meanwhile, single-family completions increased 5.5% from last June to 964,000 units and were up 6.6% from May.

Despite the reported surge in starts, the SAAR for multifamily units under construction decreased 5.5% from last June to 665,000 units and were up only 0.8% for the month. Single-family units under construction were down 6.9% for the year and 1.2% from May at 582,000 units.

Compared to one year ago, the annual rate for multifamily permitting decreased in three of the four regions, with the sharpest decline in the South (down 26.7% to 181,000 units), followed by the Midwest (down 16.2% to 67,000 units) and the West region (down 2.7% to 107,000 units). The small Northeast region saw an increase of 139.6% in their annual multifamily permitting to 89,000 units in June. Compared to the previous month, permitting was up in Northeast and Midwest and down in the South and West.

Annualized multifamily starts increased sharply in the Midwest region (up almost 300% to 127,000 units) and were up 14% in the South region to 213,000 units. The Northeast region’s multifamily starts decreased 36% to 67,000 units, while the West region saw starts decrease slightly (-0.7%) to 105,000 units. Compared to May’s SAAR, starts were up strongly in all four regions, with the largest increases in the Midwest and South.