Behind Housing Starts' Declining Numbers

For the last two years, multifamily construction starts and permits have been slowing. Now the downturn has extended to single-family housing, writes RealPage Senior Real Estate Economist Chuck Ehmann. What that might mean is complicated.

RealPage looked at seasonally adjusted annual rates (SAAR), which means it’s time to check for a caveat. Remember that seasonally adjusted rates mean someone is shifting actual data to account for how they think periodic forces and patterns might affect results. It’s a normal strategy in economic analysis and can be useful, but risks missing changes in markets and events.

A GlobeSt.com review of seasonally-adjusted and non-seasonally-adjusted government multifamily housing start data shows the two to be very close. The same is true for multifamily permits, again using government data. For single-family permits and starts, non-seasonally-adjusted figures show more volatility than seasonally-adjusted, but the overall shifts seem similar. The approach seems reasonable.

Ehmann wrote that the SAAR for multifamily starts was down from April to May by 10.3%. Year over year, it was a roughly 52% drop. Multifamily building permits (five or more units) were down 6.1% between April and May and 31.4% year over year. Multifamily permits that hadn’t yet been started were up 1.6% between April and May but down 7.9% from the previous year.

Next, single-family starts were down 5.2% between April and May and down 1.7% year over year. As Ehmann noted, the fall was to 982,000 units, the first time it was below a million units since October. Single-family permitting was down 2.9% from April to May and up 3.4% from the previous year.

His data showed January 2022 as a starting point. The fuller government data showed multifamily permits and starts falling from the mid-2000s to 2010 as a result of the Global Financial Crisis. They built up again, reaching a peak in mid-to-late 2022 not seen since 1985, and then began sliding to the present.

For single-family starts and permits, there was a late-2025 high point that then crashed precipitously by 2010, increased to the start of the short pandemic recession, up again to March 2022, then down, up, and down to the present.

Some of the factors influencing development for single-family homes have been skyrocketing housing prices and higher mortgage rates making fewer people able to buy new homes. That then made it difficult for developers to produce new homes at the same rate. As GlobeSt.com previously reported, fading housing demand had homebuilders pulling back on their plans.

There had been a rush of development in multifamily to catch up to the inability of many to buy homes as well as demographic and business shifts that needed more housing for people. But after record inventory jumps in 2023 and 2024, there’s been a natural downswing as vacancies rose and rent growth dropped. A likely result seems to be an inadequate amount of housing construction that will continue to imbalance demand and supply.