Multifamily Missing Middle Construction Unchanged

2024-02-23T08:15:28-06:00

By Robert Dietz on February 23, 2024 • The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties. The multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has disappointed since the Great Recession. For the fourth quarter of 2023, there were just 4,000 2- to 4-unit housing unit construction starts. This is flat from a year prior. As a share of all multifamily production, 2- to 4-unit development was just above 4% of the total for the fourth quarter. In contrast, from 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction. Construction of the missing middle has clearly lagged during the post-Great Recession period and will continue to do so without zoning reform focused on light-touch density. ‹ Multifamily Developer Confidence in Negative Territory in Fourth QuarterTags: missing middle, multifamily, starts

Multifamily Missing Middle Construction Unchanged2024-02-23T08:15:28-06:00

Small Decline for Multifamily Built-for-Rent Share

2024-02-22T08:18:47-06:00

By Robert Dietz on February 22, 2024 • According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts declined somewhat during the fourth quarter of 2023. For the quarter, 102,000 multifamily residences started construction. Of this total, 98,000 were built-for-rent. The market share of rental units of multifamily construction starts fell back to a still elevated 96% for the fourth quarter as the already small condo market remained held back due to higher interest rates. In contrast, the historical low share of 47% was set during the third quarter of 2005, during the condo building boom. An average share of 80% was registered during the 1980-2002 period. For the fourth quarter, there were just 4,000 multifamily condo construction starts. An elevated rental share of multifamily construction is holding typical apartment size below levels seen during the pre-Great Recession period. According to fourth quarter 2023 data, the average square footage of multifamily construction starts was relatively unchanged at 1,050 square feet. The median declined came in at 1,022 square feet. ‹ Homeownership is Key to Household WealthTags: mfbfr, multifamily, multifamily size

Small Decline for Multifamily Built-for-Rent Share2024-02-22T08:18:47-06:00

Single-Family and Multifamily Permits Down in 2023

2024-02-14T09:14:59-06:00

Over 2023, the total number of single-family permits issued year-to-date (YTD) nationwide reached 909,227. On a year-over-year (YoY) basis, this is 6.5% below the December 2022 level of 972,180. Year-to-date ending in December, single-family permits declined in all four regions. The range of permit decline spanned 5.0% in the South to 9.7% in the West. The Northeast declined by 7.1% and the Midwest declined by 7.6% in single-family permits during this time. For multifamily permits, the percentage decline spanned 14.6% in the South region to 28.5% in the Northeast. The West declined by 15.2% and the Midwest declined by 21.1% in multifamily permits during this time. Between December 2022 YTD and December 2023 YTD, except for Hawaii (+16.7%), Maryland (+8.7%), Nevada (+5.8%), West Virginia (+4.7%), Virginia (0.8%), North Carolina (0.7%), and Alabama (0.0%), all other states and the District of Columbia reported declines in single-family permits. The range of declines spanned 0.1% in Idaho to 59.4% in the District of Columbia. The ten states issuing the highest number of single-family permits combined accounted for 63.9% of the total single-family permits issued. Texas, the state with the highest number of single-family permits issued, declined 6.5% in the past 12 months; The succeeding highest state, Florida saw a decline of 6.9% while the next highest, North Carolina, posted an increase of 0.7%. For 2023, the total number of multifamily permits issued nationwide reached 561,369. This is 17.4% below the December 2022 level of 679,898. Between December 2022 YTD and December 2023 YTD, 15 states recorded growth in multifamily permits, while 35 states and the District of Columbia recorded a decline. Delaware (+96.3%) led the way with a sharp rise in multifamily permits from 562 to 1,103, while Wyoming had the greatest decline of 74.2% from 1,044 to 269. The ten states issuing the highest number of multifamily permits combined accounted for 63.2% of the multifamily permits issued. Over the last 12 months, Texas, the state with the highest number of multifamily permits issued, experienced a decline of 24.0%. Following closely, the second-highest state in multifamily permits, Florida, saw a decline of 12.4%. California, the third largest multifamily issuing state, declined by 3.4%. At the local level, below are the top ten metro areas that issued the highest number of single-family permits. Top 10 Largest Single-Family Markets Dec-23 (# of units YTD, NSA) YTD % Change (compared to Dec-22) Houston-The Woodlands-Sugar Land, TX                                         50,014 5% Dallas-Fort Worth-Arlington, TX                                         42,543 -2% Phoenix-Mesa-Scottsdale, AZ                                         24,810 -8% Atlanta-Sandy Springs-Roswell, GA                                         23,972 -9% Charlotte-Concord-Gastonia, NC-SC                                         19,088 1% Orlando-Kissimmee-Sanford, FL                                         17,035 5% Austin-Round Rock, TX                                         16,738 -22% Tampa-St. Petersburg-Clearwater, FL                                         14,827 -5% Nashville-Davidson–Murfreesboro–Franklin, TN                                         14,169 -7% Jacksonville, FL                                         12,402 -14% For multifamily permits, below are the top ten local areas that issued the highest number of permits.  Top 10 Largest Multifamily Markets Dec-23 (# of units YTD, NSA) YTD % Change (compared to Dec-22) New York-Newark-Jersey City, NY-NJ-PA                                         28,226 -39% Dallas-Fort Worth-Arlington, TX                                         24,014 -29% Austin-Round Rock, TX                                         21,861 -4% Phoenix-Mesa-Scottsdale, AZ                                         20,827 1% Los Angeles-Long Beach-Anaheim, CA                                         18,881 -13% Houston-The Woodlands-Sugar Land, TX                                         18,322 -35% Miami-Fort Lauderdale-West Palm Beach, FL                                         15,947 21% Atlanta-Sandy Springs-Roswell, GA                                         14,617 -30% Washington-Arlington-Alexandria, DC-VA-MD-WV                                         12,189 -41% Denver-Aurora-Lakewood, CO                                         11,651 -13% ‹ Inflation Remains Sticky due to Persistent Housing CostsTags: home building, multifamily, single-family, state and local markets, state permits

Single-Family and Multifamily Permits Down in 20232024-02-14T09:14:59-06:00

Single-Family Permits Down in October 2023

2023-12-15T09:19:06-06:00

Over the first ten months of 2023, the total number of single-family permits issued year-to-date (YTD) nationwide reached 773,526. On a year-over-year (YoY) basis, this is 10.7% below the October 2022 level of 865,815. Year-to-date ending in October, single-family permits declined in all four regions. The range of permit decline spanned 8.6% in the Northeast to 16.1% in the West. The South declined by 8.7% and the Midwest declined by 11.2% in single-family permits during this time. For multifamily permits, the percentage decline spanned 12.0% in the South region to 26.0% in the Northeast. The West declined by 16.4% and the Midwest declined by 22.1% in multifamily permits during this time. Between October 2022 YTD and October 2023 YTD, except for Hawaii (+18.6%) and Maryland (+7.9%), all the other states and the District of Columbia reported declines in single-family permits. The range of declines spanned 1.6% in New Hampshire to 47.8% in the District of Columbia. The ten states issuing the highest number of single-family permits combined accounted for 63.8% of the total single-family permits issued. Texas, the state with the highest number of single-family permits issued, declined 11.0% in the past 12 months while the next two highest states, Florida and North Carolina declined by 10.2% and 2.9% respectively. Year-to-date, ending in October, the total number of multifamily permits issued nationwide reached 481,612. This is 16.3% below the October 2022 level of 575,671. Between October 2022 YTD and October 2023 YTD, 12 states recorded growth, while 38 states and the District of Columbia recorded a decline in multifamily permits. Delaware (+64.9%) led the way with a sharp rise in multifamily permits from 373 to 615 while Wyoming had the largest decline of 80.9% from 1,016 to 194. The ten states issuing the highest number of multifamily permits combined accounted for 63.7% of the multifamily permits issued. Texas, the state with the highest number of multifamily permits issued, declined 21.4% in the past 12 months while the next two highest states, Florida and California declined by 9.0% and 1.5% respectively. At the local level, below are the top ten metro areas that issued the highest number of single-family permits. Top 10 Largest SF Markets Oct-23 (# of units YTD, NSA) YTD % Change (compared to Oct-22) Houston-The Woodlands-Sugar Land, TX                                         43,270 1% Dallas-Fort Worth-Arlington, TX                                         35,826 -8% Atlanta-Sandy Springs-Roswell, GA                                         20,519 -14% Phoenix-Mesa-Scottsdale, AZ                                         20,436 -16% Charlotte-Concord-Gastonia, NC-SC                                         16,241 -3% Orlando-Kissimmee-Sanford, FL                                         14,748 5% Austin-Round Rock, TX                                         14,390 -27% Tampa-St. Petersburg-Clearwater, FL                                         12,226 -11% Nashville-Davidson–Murfreesboro–Franklin, TN                                         12,083 -11% Jacksonville, FL                                         10,822 -14% For multifamily permits, below are the top ten local areas that issued the highest number of permits.  Top 10 Largest MF Markets Oct-23 (# of units YTD, NSA) YTD % Change (compared to Oct-22) New York-Newark-Jersey City, NY-NJ-PA                                         24,551 -39% Dallas-Fort Worth-Arlington, TX                                         21,484 -26% Austin-Round Rock, TX                                         18,753 -9% Phoenix-Mesa-Scottsdale, AZ                                         16,746 2% Houston-The Woodlands-Sugar Land, TX                                         16,727 -31% Los Angeles-Long Beach-Anaheim, CA                                         15,950 -14% Miami-Fort Lauderdale-West Palm Beach, FL                                         15,530 37% Atlanta-Sandy Springs-Roswell, GA                                         13,796 -19% Washington-Arlington-Alexandria, DC-VA-MD-WV                                         10,494 -38% Seattle-Tacoma-Bellevue, WA                                           9,577 -44% ‹ Share of Bedrooms in New Single-Family Homes in 2022Tags: home building, multifamily, single-family, state and local markets, state permits

Single-Family Permits Down in October 20232023-12-15T09:19:06-06:00

Absorption of New Multifamily Units Rises as Completions Near 100K in Second Quarter of 2023

2023-11-28T09:19:11-06:00

By Jesse Wade on November 28, 2023 • The most recent release of the Census Bureaus’ Survey of Market Absorption of New Multifamily Units (SOMA) reported that of the 99,290 unfurnished, unsubsidized apartments completed in the second quarter of 2023, 65% were absorbed into the market in the first three months following completion. 83% of 3,467 condominiums completed in the second quarter were absorbed within the first three months following completion. With over an estimated one million multifamily units currently under construction, the level of completed apartments rose to its highest level in the second quarter of 2023 according to SOMA. The number of completions in the second quarter was at 99,290, which is 29.6% higher than the second quarter of 2022 and 19.6% higher than the first quarter of 2023. The percent of apartments absorbed within three months following completion, was at a non-seasonally adjusted rate of 65%, higher than the 2023 first quarter absorption rate by eight percentage points while seven percentage points less than the second quarter of 2022. As the absorption rate is non-seasonally adjusted, the absorption rate likely seasonally peaked for apartments during the second quarter. Looking ahead, apartment completions will continue to set record highs as a new units roll out onto the market. This will help slow rent growth, which has been a significant contributor to inflation. The rent data reported from SOMA shows two consecutive quarters of asking rent declines for newly completed apartments, with $1,763 being the median asking rent in the second quarter of 2023. Condominiums completed in the second quarter of 2023 stood at 3,467, which is 32.6% lower than the number of condos completed in the second quarter of 2022. The percent of these condo purchases within three months following completion stood at 83%, the third consecutive quarter where newly completed condos were absorbed into the market at a rate of 80%. The listed sales price of new condos was at a median of $532,200 in the second quarter, down 26.7% from one year ago. ‹ No Change for Multifamily Missing Middle ConstructionTags: Absorption Rate, multifamily, SOMA

Absorption of New Multifamily Units Rises as Completions Near 100K in Second Quarter of 20232023-11-28T09:19:11-06:00

No Change for Multifamily Missing Middle Construction

2023-11-28T08:15:02-06:00

By Robert Dietz on November 28, 2023 • The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties. The multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has disappointed since the Great Recession. For the third quarter of 2023, there were just 3,000 2- to 4-unit housing unit construction starts. This is down from a year prior. As a share of all multifamily production, 2- to 4-unit development was just above 3% of the total for the third quarter. In contrast, from 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction. Construction of the missing middle has clearly lagged during the post-Great Recession period and will continue to do so without zoning reform focused on light-touch density. ‹ New Home Sales Weaken in OctoberTags: economics, home building, missing middle, multifamily, starts

No Change for Multifamily Missing Middle Construction2023-11-28T08:15:02-06:00

Multifamily Built-for-Rent Remains Elevated

2023-11-27T08:18:45-06:00

By Robert Dietz on November 27, 2023 • According to NAHB analysis of quarterly Census data, the count of multifamily, for-rent housing starts remained elevated during the third quarter of 2023. For the quarter, 104,000 multifamily residences started construction. Of this total, 101,000 were built-for-rent. The market share of rental units of multifamily construction starts was near an all-time high of 98% for the third quarter as the already small condo market remained held back due to higher interest rates. In contrast, the historical low share of 47% was set during the third quarter of 2005, during the condo building boom. An average share of 80% was registered during the 1980-2002 period. For the third quarter, there were just 3,000 multifamily condo construction starts. An elevated rental share of multifamily construction is holding typical apartment size below levels seen during the pre-Great Recession period. According to third quarter 2023 data, the average square footage of multifamily construction starts moved down to 1,032. The median declined to 979 square feet. ‹ Home Size Trending LowerTags: economics, home building, housing, mfbfr, multifamily, multifamily size

Multifamily Built-for-Rent Remains Elevated2023-11-27T08:18:45-06:00

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