Single-Family Permits Up in March 2024  

2024-05-14T09:19:47-05:00

Over the first three months of 2024, the total number of single-family permits issued year-to-date (YTD) nationwide reached 241,311. On a year-over-year (YoY) basis, this is an increase of 25.9% over the March 2023 level of 191,695. Year-to-date ending in March, single-family permits were up in all four regions. The range of permit increase spanned 38.0% in the West to 12.5% in the Northeast. The Midwest was up by 29.3% and the South was up by 22.7% in single-family permits during this time. For multifamily permits, three out of the four regions posted declines. The Northeast, the only region to post an increase, was up by 49.0%, while the South posted a decline of 35.9%, the West declined by 32.6%, and the Midwest declined by 8.6%. Between March 2024 YTD and March 2023 YTD, 47 states posted an increase in single-family permits. Massachusetts, Rhode Island, Alaska, and the District of Columbia reported declines in single-family permits. The range of increases spanned 90.5% in Montana to 0.8% in New Jersey. The ten states issuing the highest number of single-family permits combined accounted for 65.5% of the total single-family permits issued. Texas, the state with the highest number of single-family permits, issued 40,651 permits over the first three months of 2024, which is an increase of 34.7% compared to the same period last year. The succeeding highest state, Florida, was up by 15.1% while the next highest, North Carolina, posted an increase of 15.5%. Year-to-date ending in March, the total number of multifamily permits issued nationwide reached 117,695. This is 22.8% below the March 2023 level of 152,417. Between March 2024 YTD and March 2023 YTD, 15 states recorded growth in multifamily permits, while 35 states and the District of Columbia recorded a decline. Kansas (+282.7%) led the way with a sharp rise in multifamily permits from 336 to 1,286, while North Dakota had the greatest decline of 92.8% from 429 to 31. The ten states issuing the highest number of multifamily permits combined accounted for 64.9% of the multifamily permits issued. Over the first three months of 2024, Texas, the state with the highest number of multifamily permits issued, experienced a decline of 36.7%. Following closely, the second-highest state in multifamily permits, Florida, saw a decline of 44.7%. New York, the third largest multifamily issuing state, increased by 120.9%. At the local level, below are the top ten metro areas that issued the highest number of single-family permits. For multifamily permits, below are the top ten local areas that issued the highest number of permits. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

Single-Family Permits Up in March 2024  2024-05-14T09:19:47-05:00

High Interest Rates, Construction Costs Are Serious Impediments for New Multifamily Development

2024-05-10T09:14:19-05:00

Every quarter, the National Association of Home Builders (NAHB) conducts a survey of multifamily builders/developers and property managers.  The first part of the survey collects the information required to produce the Multifamily Market Survey (MMS). The MMS produces two separate indices: 1) the Multifamily Production Index (MPI) and 2) the Multifamily Occupancy Index (MOI).  The MPI is a weighted average of current conditions in three markets: low-rent and market rate rental units-apartments along with for-sale units (e.g., condominiums).  The MOI is a weighted average of current occupancy indexes for class A, B, and C multifamily units.  Results for Q1 2024 were released yesterday which can be accessed here. In addition to the questions required for the MMS and its components, the quarterly survey sometimes includes a set of “special” questions on a topic of current interest to the multifamily industry.  The special question included in the Q1 2024 survey asked multifamily builders and property managers about how serious impediments are to starting a new multifamily development today. This was completed using a scale from1 to 5, with 1 being no impediment at all and 5 being a very serious impediment. As shown in Figure 1, high interest rates and high construction costs are the top impediments to starting new multifamily development , with both options receiving an average rating above 4 and at least 80% of respondents rating each option as a 4 or 5.  The next four options (high land costs, regulations, rising operations costs, lack of lender interest) are moderate impediments, with at least 50% of respondents rating each option as a 4 or 5.  The least likely impediment to additional multifamily construction is a rising/high vacancy rate, which received the lowest average rating of 2.5, corroborating the high MOI reading from the most recent MMS. Discover more from Eye On Housing Subscribe to get the latest posts to your email.

High Interest Rates, Construction Costs Are Serious Impediments for New Multifamily Development2024-05-10T09:14:19-05:00

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

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