Multifamily housing starts jumped on a monthly and yearly basis, buoying new residential construction overall, according to HUD and the U.S. Census Bureau’s latest residential construction report released Thursday. The Census Bureau is still catching up on releasing data that was delayed by the federal government shutdown.
Starts for buildings with five or more units rose 29.1% in January from December’s revised numbers to a seasonally adjusted rate of 524,000. That number represents a yearly increase of 56.9%.
Multifamily construction — which can be volatile — surged to “what appears to be an unsustainable high annualized pace,” NAHB Chief Economist Robert Dietz said in a Thursday press release.
“However, this data may be revised lower in future revisions,” said Dietz. “Furthermore, prior NAHB analysis of the geography of permit data has shown gains for apartment construction occurring in lower density areas, such as exurbs, secondary cities and small towns.”
Nonetheless, that healthy multifamily production helped lift overall housing starts, which increased 7.2% in January above the revised December estimate of 1.39 million to a seasonally adjusted annual rate of 1.49 million units. That’s 9.5% above the January 2025 rate of 1.36 million.
Single-family home starts clocked in at a rate of 935,000, 2.8% below the revised December figure of 962,000, with the greatest strength in the Midwest and West.
In January, many parts of the country suffered from record-breaking cold weather that halted construction activity, according to Thursday analysis from financial services firm KPMG. Still, multifamily starts rose in all regions except for the Midwest.
“Multifamily construction had been recovering after bottoming out in mid-2024 as builders worked their way through record backlogs. Rents are expected to rise in 2026 in regions where they had softened the most, after falling on a national level in 2025,” according to KPMG.
Multifamily building permits, which signal future construction activity, fell 13.4% month over month but were 8.9% higher than last year. Overall residential permits dropped 5.4% from the previous month due to weaker single family and multifamily activity.
Multifamily project completions stood at a seasonally adjusted rate of 532,000 in January, up 16.2% MOM but down 15.6% from the same period last year. Overall housing completions were 1.53 million, up 4.8% on a monthly basis but down 7.5% year over year.
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