Multifamily Permits Fall 16.8%
Even though 8.3% more permits were granted for multifamily construction in August compared to July this year, viewing on an annual basis the rate of permitting dropped 16.8% in all U.S. census regions. That came even as multifamily deliveries spiked.
With a 42% plunge in annualized multifamily permitting, the West experienced the biggest drop in permits issued in August, according to an analysis by RealPage Analytics of new census data. It was followed by the Northeast with a 22.4% drop, and the Midwest with a 9.5% dip. The South slowed the least, falling by just 1.4% over the year.
"Of the top 10 multifamily permitting markets, all but New York decreased its annual totals from the year before and some were significant declines. Dallas had the largest decrease in annual multifamily permitting of the top 10 markets (-10,640 units), followed closely by Houston (-10,437 units), Atlanta (-6,236 units), Los Angeles (-5,800 units), Washington, DC (-5,512 units), Raleigh/Durham (-3,740 units), Phoenix (-2,327 units), Tampa (-1,941 units) and Austin (-1,805 units)," the report said. The 140,593 permits issued in the top 10 metros were 23% fewer than the number issued the year before and down 1.1% from July.
Other major markets where annual permitting declined were Minneapolis/St. Paul, San Antonio, Jacksonville, Portland, Nashville, Denver, Miami, Orlando, Salt Lake City and Riverside.
However, some metros bucked the trend and saw more permits issued over the year. In addition to New York, where 23% more units were permitted, permit numbers also rose in Fort Worth, Greensboro/Winston-Salem, Asheville, Omaha, Knoxville, Milwaukee, and San Diego. The top 10 cities for permit issuance were Brooklyn, Austin, Phoenix, Los Angeles, Charlotte, Austin, Fort Worth, Raleigh, Atlanta, and Columbus.
The lower rate of permit issuance in many regions contrasted with the sharp spike in multifamily deliveries. More multifamily units were completed in the past 12 months than in any year in the past five decades, totaling 740,000 units. "That was a 36.5% increase from July's seasonally adjusted total of 542,000 units and 79.2% above last August's total," stated senior real estate economist Chuck Ehmann. However, multifamily starts dropped more than 6% during the year to 330,000 units, and the number of units under construction also fell by 850,000 during the year.
In contrast, single-family starts increased 15.8% from July through August and 5.2% for the year and were expected to keep rising as interest and mortgage rates fall. The annualized rates for permits remained unchanged at 967,000 units.
"Single-family completions were down 5.6% for the month but up 8.4% for the year to 1.029 million units. The number of single-family units under construction declined a slight 0.3% from July to 642,000 units and were down 5.2% from one year ago. Single-family units authorized, but not started totaled 148,000 units, up 2.8% for the month and 5.7% for the year," the report said.
Source: GlobeSt/ALM