Multifamily housing starts tumbled in September on a monthly and yearly basis, according to HUD and the U.S. Census Bureau’s latest residential construction report released Tuesday.
In September, the seasonally adjusted starts rate for buildings with five or more units was 349,000, down 7.2% from August and down 25.9% year over year.
Total privately owned housing starts stood at a seasonally adjusted rate of 1.2 million, 5.2% lower than August’s revised rate and 7.4% lower than September 2025. Single-family starts stood at a rate of 859,000 in September, 4.6% below the revised August figure but 2.6% higher than the same period last year.
The number of apartment projects coming online has continued to wane. Multifamily project completions in September were at a seasonally adjusted rate of 339,000, up 14.9% month over month and roughly in line with July’s number, but down 20.4% YOY.
Multifamily building permits, which signal future construction activity, stood at a seasonally adjusted rate of 503,000. That’s up 5.9% MOM and 1% higher than September 2025.
Although a sizable number of housing projects continue to receive permits, that doesn’t necessarily mean they will actually get built, Leaselock Chief Economist Greg Willett told Multifamily Dive.
“When I talk to developers now, they tend to say, ‘We've got planned properties that are ready to go. We could start tomorrow, but it's a question of, is the money there,’” Willett said. “We're starting to get a little bit better on the rent growth numbers, so that historically would tend to trigger some additional starts.”
However, there are still financing hurdles. “At the same time, man, look at interest rates,” said Willett. “That's downward pressure preventing you from starting. So, are these projects going to go or not? I'm not sure.”
Regional differences
On a regional basis, the South had by far the strongest showing, with overall starts up 11% YOY in September. Single-family starts were up 8.8% YOY. The South was the only region to post a positive year-over-year number.
By contrast, the Northeast had the weakest starts performance in September, with overall starts down 30.9% YOY, followed by the West, with overall starts down 25.4% YOY. The Midwest saw overall starts fall 19.4% YOY. In all of those areas, the single-family segment performed stronger than the overall number with apartments included.
High construction materials costs continue to squeeze builders, Construction Dive reported. Prices for construction inputs jumped 2.2% MOM in September and 11.2% YOY — the largest annual increase in almost four years, according to a recent Associated Builders and Contractors analysis of federal Producer Price Index data.
Higher fuel costs from the Iran war and tariffs on key building materials drove a substantial portion of the increase last month, according to ABC. Its analysis found that petroleum products had the largest price increases, while the cost of metals also jumped.
In particular, “lead times for key steel components have lengthened, making it harder for contractors to keep projects on schedule,” Associated General Contractors of America Chief Economist Ken Simonson said in a report last week.
Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
