The Census Bureau’s preliminary estimate of starts in buildings with five or more apartments for June came in at 213,000 (at a seasonally adjusted annual rate). This is a 17 percent increase from May and reversed well over half of the previous month’s decline. (Month to month fluctuations on this order of magnitude are typical for multifamily construction. ) On a year-over-year basis, five-plus starts were up 29 percent, reflecting the generally upward trend that has prevailed in this segment of the construction industry since the end of 2010.
Meanwhile, the rate at which new five-plus permits were issued declined 11 percent in June, to 241,000. Although not as high as the rate posted in March or May of this year, 241,000 is still the third highest seasonally adjusted five-plus permit rate on record since 2008, and is up 22 percent year-over-year.
The number of five-plus permits in the pipeline (previously authorized but not yet turned into starts by the end of the month) also increased in June—by 5 percent, to 41,500. Although permits in the pipeline are not seasonally adjusted and the series tends to be volatile, 41,500 is the highest the unused five-plus permit number has been since early 2009. Overall, the multifamily plus permit numbers in the Census Bureau’s June construction report were relatively healthy and suggest that a five-plus starts rate in the neighborhood of 200,000 is sustainable over the short run.