Dive Brief:

• Starts for buildings with five or more units jumped 11.1% month over month in April and increased 28.8% year over year to a seasonally adjusted rate of 420,000, according to a monthly report from HUD and the U.S. Census Bureau. 
• Apartment developers pulled permits for a seasonally adjusted rate of 431,000 apartments in buildings with five units or more, a 2.6% YOY increase and a 4.4% decrease compared to March.
• At the end of April, 733,000 units were under construction, a 20.2% YOY drop and a 0.7% month-over-month decline. Multifamily developers finished an annualized 507,000 apartments in buildings with five or more units, a 1.7% YOY decline and a 0.2% month-over-month increase. 

Dive Insight:

Overall housing starts came in at a seasonally adjusted annual rate of 1.4 million in April — a 1.7% decrease YOY and a 1.6% increase versus March. Single-family builders broke ground on 927,000 homes, a 12% YOY decline and a 2.1% month-over-month decrease.

A one-month snapshot of starts can be very volatile, so April’s numbers should be taken with a grain of salt. 

While starts for buildings with five or more units jumped in April, developers still face headwinds. Challenges with lining up equity still exist, and the uncertainty around the Trump administration’s tariff policy provides another unknown.

“It's been tough to make deals pencil, even for the last couple of years, just because of the increase in costs and interest rates,” Cameron Gunter, co-CEO of PEG, a Provo, Utah-based owner, operator and developer of multifamily, hospitality and build-to-rent properties, told Multifamily Dive. “So, having this uncertainty on tariffs, especially with China, has caused us even bigger issues of not knowing.”

Others agree.

“We already saw the impacts of the tariffs from the first Trump administration,” Rene Bello, founder and CEO of Miami-based real estate investment and development firm BLDG Ventures, told Multifamily Dive. “This one [time] is definitely a bit different. You can feel it. It's a bit more impactful.”

However, others aren’t seeing significant changes in pricing. Chris Finlay, CEO of Tyson's Corner, Virginia-based owner, manager and developer Middleburg Communities, said costs moved less than 1% for a project his firm is working on in Florida, when he looked at pre- and post-tariff costs.

“In short, what we're noticing is there is a lot of discussion of tariffs,” Finlay said. “We have not yet actually seen it impact actual pricing on the ground.”

Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.