In November, the (seasonally adjusted) annual rate of starts in buildings with five or more apartments was 285,000, according to the latest release from the Census Bureau’s Manufacturing and Construction Division. In the release this shows up as a 4,000 increase from October, but the five-plus starts rate for October was revised downward by 4,000; so the preliminary rate for November is exactly the same as the rate initially reported for October a month ago. Irrespective of any revision, the five-plus starts rate has been relatively stable and over 280,000 for two consecutive months now—the highest this measure of apartment production has been since July of 2008.
Although not as high as annual production during what many consider the “golden age” for multifamily housing (roughly 1997 through 2006), a five-plus starts rate of 285,000 is high enough to rank as one of the weaker golden-age months.
Meanwhile, the rate at which new five-plus permits were issued in November increased by 10 percent—largely offsetting the previous month’s decline and taking the five-plus permit rate back up over 300,000. The backlog of unused, previously issued five-plus permits in the pipeline was also relatively stable in November, at 44,000 (not seasonally adjusted). On balance, the November permit numbers indicate that, subject to the normal monthly fluctuations, a five-plus starts rate in the neighborhood of 280,000 is likely to be sustainable over the short run.