The Census Bureau recently released 2016 multifamily completions data from the Survey of Construction. A total of 159,000 housing units, or 49 percent of all multifamily completions, were in buildings with 50 or more units, more than any other building type (Figure 1).
Multifamily completions in large buildings (50 or more units) grew significantly after the Great Recession, but growth has slowed recently. From 2011 to 2015, annual growth in multifamily completions averaged 32 percent, but fell to 9 percent between 2015 and 2016. The number of units completed in buildings with 30 to 49 units also grew from 2015 to 2016, but was negative in buildings with 10 to 29 units and those with 9 or fewer units.
A breakdown of multifamily units completed in large buildings reveals interesting trends. After the Great Recession, the number of for-rent multifamily units completed increased significantly, while for-sale multifamily completions remained low (Figure 2).
However, from 2015 to 2016, growth in for-rent completions slowed to 3 percent, down from a 14 percent growth rate between 2014 and 2015. On the other hand, the number of for-sale multifamily completions jumped considerably: growing by 225 percent from 4,000 units in 2015 to 13,000 units in 2016.
Among US regions, there are also some interesting trends (Figure 3). Since the end of the recession, multifamily completions in large buildings increased significantly in the South and the West, but grew at a much slower pace in the Northeast and the Midwest.
From 2015 to 2016, all regions with the exception of the Midwest experienced growth in multifamily completions in large buildings. In the Midwest, completions in large buildings decreased by 22 percent in 2016, the first year since 2012 in which there was a decline.
In conclusion, trends show that for-rent multifamily completions in large buildings continue to dominate the multifamily sector, but growth has slowed for this segment, likely signaling the arrival of an equilibrium point between supply and demand.