In terms of units authorized but not begun during May, both single-family and multifamily saw gains compared to April, of 4.0% and 3.2%, respectively. However, authorized multifamily units were off by 11.1% on a Y-O-Y basis. Multifamily units under construction were up 5.6% Y-O-Y.

Rebecca Mitchell and Mike Montgomery, US economists with IHS Markit, note that multifamily starts have for the most part trailed the number of permits for the past few months. “As we enter prime construction season, we expect a significant bounce back in multifamily starts in the month of June,” they say.

“It is unlikely that housing starts will exceed 1.2 million for the second quarter in light of April's not-insubstantial downward revisions and the May numbers,” according to Mitchell and Montgomery. “The month-to-month numbers are not as important as the trend and direction, as the fundamentals are there, and while it may not be evident in the Q2 numbers, we expect it in Q3.”

WASHINGTON, DC—May housing starts declined from the previous month and on a year-over-basis, the federal government said Friday. In all but one residential construction metric reported Friday, housing units under construction, multifamily posted especially sharp Y-O-Y drops.

Overall, housing starts fell 5.5% from April to a seasonally adjusted annual rate of 1.09 million units, according to data from the Census Bureau and the US Department of Housing and Urban Development. Multifamily starts fell 9.7% from the previous month to a seasonally adjusted annual rate of 289,000 units, while single-family production dipped 3.9% to 794,000. On a Y-O-Y basis, multifamily starts dropped 25.7% on a seasonally adjusted basis. April's numbers for starts were also revised downward across the board.

“Today's report is consistent with builder sentiment in the housing market, indicating some weakness after a strong start to the year,” says Granger MacDonald, chairman of the National Association of Home Builders and CEO of the MacDonanld Cos. in Kerrville, TX, a multifamily builder and developer. “Ongoing job growth, rising demand and low mortgage rates should keep the single-family sector moving forward this year, even as builders deal with ongoing shortages of lots and labor.”

Permits also saw declines during May, with single-family permitting down 1.9% from April and multifamily permitting off by 10.1% from April and 13.1% from a year ago. Across all housing categories, permits fell 4.9% to an annual rate of 1,168,000 units, the lowest since April of last year.

In terms of units authorized but not begun during May, both single-family and multifamily saw gains compared to April, of 4.0% and 3.2%, respectively. However, authorized multifamily units were off by 11.1% on a Y-O-Y basis. Multifamily units under construction were up 5.6% Y-O-Y.

Rebecca Mitchell and Mike Montgomery, US economists with IHS Markit, note that multifamily starts have for the most part trailed the number of permits for the past few months. “As we enter prime construction season, we expect a significant bounce back in multifamily starts in the month of June,” they say.

“It is unlikely that housing starts will exceed 1.2 million for the second quarter in light of April's not-insubstantial downward revisions and the May numbers,” according to Mitchell and Montgomery. “The month-to-month numbers are not as important as the trend and direction, as the fundamentals are there, and while it may not be evident in the Q2 numbers, we expect it in Q3.”