Dive Brief:
- New multifamily construction rose in April on a monthly and yearly basis, according to HUD and the U.S. Census Bureau’s latest residential construction report released Thursday.
- The seasonally adjusted April starts rate for buildings with five units or more was 529,000, per the report. That’s a 14.3% increase from March and a 23.3% increase from April 2025.
- The multifamily segment had the strongest construction performance in April: The rate of multifamily project starts increased by a greater percentage last month than single-family, and outpaced new housing construction overall.
Dive Insight:
Total privately-owned housing starts stood at a rate of 1,465,000 in April, down 2.8% from March but up 4.6% from the same period last year. Meanwhile, single-family housing starts in April dipped to 930,000, which is 9% below the revised March figure of 1,022,000 and down 2.4% year over year.
The West far outperformed other regions on a yearly basis, with a 49% YOY increase in overall housing starts. The Midwest fell the most, with starts down 9.6% YOY. The South and Northeast also both decreased 3.2% from the same period last year.
Multifamily building permits, which signal future construction activity, rose in April to 514,000, a 22.7% MOM increase and an uptick of 11.5% YOY, according to the release.
Overall, housing construction permits stood at 1,442,000, 5.8% higher than March but down 0.2% year over year. The Midwest had the strongest permit gains on a year-over-year basis, growing 17.2% from April 2025, while the West dropped the most, down 9.7% YOY.
Multifamily project completions stood at a seasonally adjusted rate of 529,000, up 6.4% year over year and 16.5% from March.
Nonetheless, there are signs that the building boom is slowing.
In recent earnings calls, REIT leaders said although they are still contending with supply-driven pressure — particularly in high-growth areas — they are starting to see high levels of supply burn off, and expect the tighter apartment market to provide a boost as the year progresses.
For example, Camden Executive Chairman of the Board and former CEO Ric Campo said in a May 1 earnings call that, “New supply has peaked and has been cut in half in most of our markets. First-quarter apartment net absorption was one of the best since 2016, despite slow job growth and tepid consumer sentiment.”
Meanwhile, Mid-America Apartment Communities leaders saw absorption outpace supply in the first quarter, and expect that trend to continue as new construction slows, while Essex said it benefited from “historical low” multifamily permitting activity in California in Q1.
High levels of apartment supply are lingering in the Sun Belt, UDR’s Chief Operating Officer Mike Lacy said on a Q1 earnings call, but he expects that to ease as the year progresses. AvalonBay leaders said lower levels of supply and reduced concessions are expected to be its main performance drivers in the second half of the year.
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