Predictions that multifamily housing construction would taper off in 2015 may have underestimated the ongoing demand for this kind of housing, the vast majority of which is being marketed as rentals.
Seasonally adjusted annualized starts for structures with five or more units rose to 476,000 in June, an 18-year high, according to Commerce Department estimates released a few days ago. That number was 28.6% higher than the annualized multifamily starts rate in May, and 55% higher than the comparable number in June 2014.
Perhaps more significant is the fact that multifamily continues to propel most of the housing sector’s current growth. While annualized single-family starts in June, at 685,000 units, were 14.7% ahead of June 2014, they actually declined by 0.9% compared to May 2015.
“The multifamily gains this month are encouraging and show that the millennial generation continues to be drawn to the rental market,” said Tom Woods, a home builder from Blue Springs, Mo., who is chairman of the National Home Builders Association (NAHB).
All told, the year-over-year annualized rate for all starts was up 26.6% in June to 1,174,000 units.
The NAHB/Wells Fargo Housing Market Index, which tracks Builder Confidence levels, hit 60 in July. The Index also revised its June level to 60. The last time this Index got this high was November 2005.
If permit activity is a gauge of future optimism about demand, builders remain solidly behind multifamily. The annualized rate in June for permits issued for structures five or more units was up 79% to 621,000 units, compared to June 2014. Single-family permits, on the other hand, were up 6% to 687,000, according to Commerce’s estimates. All told, annualized new-home building permits jumped 30% to 1,343,000.
The latest annualized data show that 500,000 structures with five or more units were under construction in June, 20.5% more than in June 2014; and 317,000 units were completed, a 17.9% gain.
David Crowe, NAHB’s chief economist, noted that while the starts and Builder Confidence numbers were positive signs, he cautioned that builders “still face a number of challenges, including shortages of lots and labor.”
Related Stories
| Oct 13, 2010
Residences bring students, faculty together in the Middle East
A new residence complex is in design for United Arab Emirates University in Al Ain, UAE, near Abu Dhabi. Plans for the 120-acre mixed-use development include 710 clustered townhomes and apartments for students and faculty and common areas for community activities.
| Oct 13, 2010
Community center under way in NYC seeks LEED Platinum
A curving, 550-foot-long glass arcade dubbed the “Wall of Light” is the standout architectural and sustainable feature of the Battery Park City Community Center, a 60,000-sf complex located in a two-tower residential Lower Manhattan complex. Hanrahan Meyers Architects designed the glass arcade to act as a passive energy system, bringing natural light into all interior spaces.
| Oct 12, 2010
The Watch Factory, Waltham, Mass.
27th Annual Reconstruction Awards — Gold Award. When the Boston Watch Company opened its factory in 1854 on the banks of the Charles River in Waltham, Mass., the area was far enough away from the dust, dirt, and grime of Boston to safely assemble delicate watch parts.
| Sep 13, 2010
Richmond living/learning complex targets LEED Silver
The 162,000-sf living/learning complex includes a residence hall with 122 units for 459 students with a study center on the ground level and communal and study spaces on each of the residential levels. The project is targeting LEED Silver.
| Sep 13, 2010
Committed to the Core
How a forward-looking city government, a growth-minded university, a developer with vision, and a determined Building Team are breathing life into downtown Phoenix.
| Aug 11, 2010
Brown Craig Turner opens senior living studio
Baltimore-based architecture and design firm Brown Craig Turner has significantly expanded its housing design capabilities and expertise with the launch of its new senior living studio.
| Aug 11, 2010
CTBUH changes height criteria; Burj Dubai height increases, others decrease
The Council on Tall Buildings and Urban Habitat (CTBUH)—the international body that arbitrates on tall building height and determines the title of “The World’s Tallest Building”—has announced a change to its height criteria, as a reflection of recent developments with several super-tall buildings.
| Aug 11, 2010
Morphosis builds 'floating' house for Brad Pitt's Make It Right New Orleans foundation
Morphosis Architects, under the direction of renowned architect and UCLA professor Thom Mayne, has completed the first floating house permitted in the U.S. for Brad Pitt’s Make It Right Foundation in New Orleans.The FLOAT House is a new model for flood-safe, affordable, and sustainable housing that is designed to float securely with rising water levels.
| Aug 11, 2010
Bovis Lend Lease, Webcor among nation's largest multifamily contractors, according to BD+C's Giants 300 report
A ranking of the Top 50 Multifamily Contractors based on Building Design+Construction's 2009 Giants 300 survey. For more Giants 300 rankings, visit http://www.BDCnetwork.com/Giants
