The US Census Bureau recently released data on 2017 multifamily unit completions by building type from the Survey of Construction (SOC). In 2017, there was a significant expansion in the construction of units in large multifamily buildings (buildings with 50 or more units): units in these buildings grew by 18 percent to 187,000, the largest number since the start of the series in 1972 (Figure 1). These units accounted for more than half of all multifamily completions, also the first time since the series commenced.

Figure 1 also shows multifamily unit completions in smaller buildings. Units in buildings with 9 or fewer units and 10 to 29 units grew in 2017 by 4 and 10 percent, respectively, a slower pace than in large multifamily buildings. Meanwhile, units in buildings with 30 to 49 units fell by 4 percent.

Since 2011 for-rent units in large multifamily buildings have grown tremendously, while for-sale unit growth in these buildings has been essentially flat (Figure 2). In 2007, immediately before the Financial Crisis, there was a boom in multifamily for-sale construction, to the point where for-rent and for-sale completions were about the same. In 2017, the gap widened to its highest level since then: for-rent units in large multifamily buildings grew 23 percent to 179,000 (YOY) and for-sale units fell by 63 percent to 8,000 (YOY).

Figure 3 gives a regional breakdown of units in buildings with 50 or more units. While all regions had growth in 2017, the South and the West continued to account for most of the units being built in these buildings. However, the Northeast and the Midwest experienced the highest rate of growth from 2016 to 2017, with units expanding by 46 and 50 percent, respectively. Units in large multifamily buildings grew by 4 percent in the South and by 11 percent in West during the same time period.

Tags: multifamily, multifamily completions, Survey of Construciton