Excerpt:
Possibly Important: Multi-family permits averaged 547,000 SAAR over the last three months after averaging close to 650,000 SAAR over the previous 8 months. This decline in permits is a possible signal that the expected decline in multi-family starts has begun (although permits aren’t a perfect leading indicator for starts).
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The fourth graph shows housing starts under construction, Seasonally Adjusted (SA).Red is single family units. Currently there are 752 thousand single family units (red) under construction (SA). This was down in January compared to December, and 76 thousand below the recent peak in April and May 2022. Single family units under construction have peaked since single family starts are now declining. The reason there are still so many homes under construction is probably due to supply constrain
Blue is for 2+ units. Currently there are 948 thousand multi-family units under construction. This is the highest level since November 1973! For multi-family, construction delays are probably also a factor. The completion of these units should help with rent pressure.
Combined, there are 1.700 million units under construction, just below the all-time record of 1.711 million set in October 2022.
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The weakness in 2022 was mostly for single family starts; however, it appears the expected decline in multi-family starts has begun.
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