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
| Jun 9, 2014
Green Building Initiative launches Green Globes for Sustainable Interiors program
The new program focuses exclusively on the sustainable design and construction of interior spaces in nonresidential buildings and can be pursued by both building owners and individual lessees of commercial spaces.
Sponsored | | Jun 4, 2014
Fiber cement panels bridge historic and modern at Minneapolis apartment complex
The design team for the Third North apartment complex specified Nichiha’s Illumination Series architectural panels in a blend of six colors—divided into swaths of reds and swaths of grays—that combine with a rectilinear shape to complement nearby brick.
| Jun 3, 2014
Libeskind's latest skyscraper breaks ground in the Philippines
The Century Spire, Daniel Libeskind's latest project, has just broken ground in Century City, southwest of Manila. It is meant to accommodate apartments and offices.
| Jun 2, 2014
Parking structures group launches LEED-type program for parking garages
The Green Parking Council, an affiliate of the International Parking Institute, has launched the Green Garage Certification program, the parking industry equivalent of LEED certification.
| May 30, 2014
MIT researchers create 'home in a box' transformable wall system for micro apartments
Dubbed CityHome, the system integrates furniture, storage, exercise equipment, lighting, office equipment, and entertainment systems into a compact wall unit.
| May 30, 2014
Developer will convert Dallas' storied LTV Building into mixed-use residential tower
New Orleans-based HRI Properties recently completed the purchase of one of the most storied buildings in downtown Dallas. The developer will convert the LTV Building into a mixed-use complex, with 171 hotel rooms and 186 luxury apartments.
| May 29, 2014
7 cost-effective ways to make U.S. infrastructure more resilient
Moving critical elements to higher ground and designing for longer lifespans are just some of the ways cities and governments can make infrastructure more resilient to natural disasters and climate change, writes Richard Cavallaro, President of Skanska USA Civil.
| May 29, 2014
Wood advocacy groups release 'lessons learned' report on tall wood buildings
The wood-industry advocacy group reThink Wood has released "Summary Report: Survey of International Tall Wood Buildings," with informatino from 10 mid-rise projects in Europe, Australia, and Canada.
| May 28, 2014
Moshe Safdie's twin residential towers in Singapore will be connected by 'sky pool' 38 stories in the air [slideshow]
Moshe Safdie's latest project, a pair of 38-story luxury residential towers in Singapore, will be linked by three "sky garden" bridges, including a rooftop-level bridge with a lap pool running the length between the two structures.
| May 27, 2014
America's oldest federal public housing development gets a facelift
First opened in 1940, South Boston's Old Colony housing project had become a symbol of poor housing conditions. Now the revamped neighborhood serves as a national model for sustainable, affordable multifamily design.
