9/19/2007
Regis J. Sheehan & Associates
Apartment and total multifamily housing unit starts recovered a bit in August, but permit activity increased very little according to Robert Sheehan, consulting economist for the National Apartment Association.
“The meltdown in the for-sale housing markets may be beginning to spur rental housing construction,” Sheehan said. “Also, rental apartment vacancy rates are improving and rent increases are higher. Stronger rental housing construction may now be offsetting the weakness in the multifamily condominium and cooperative markets.”
Apartment (units in structures with 5 or more units) jumped 16.5 percent to a 311,000 unit rate during August from 267,000 in July, according to the U.S. Department of Commerce. Total multifamily construction starts were up 12.8 percent to a 343,000 unit rate in August from the 304,000 unit rate a month earlier. Single family starts were down 7.1 percent to a 988,000 unit rate, the lowest rate since March 1995. Total housing starts occurred at a 1.331 million unit annual rate in August 2.6 percent declined from the 1.367 million unit rate in July. The August rate for total housing starts was the lowest in 12 years.
Permits for apartment units increased 0.3 percent in August. Apartment permits were issued at a 324,000 unit rate vs. 323,000 in July. Total multifamily permits occurred at a 383,000 unit rate in August up 0.5 percent from the 381,000 in July.
All multifamily starts totaled 198,000 units over the first eight months of this year vs. 224,300 units a year ago, an 11.7 percent drop. Apartment starts were 176,000 units down 8.9 percent from 193,300 units through August of last year.