Multifamily starts jump, but some question the data’s accuracy

Earlier this week, HUD and the U.S. Census Bureau once more reported robust numbers for multifamily development.

Begins for buildings with 5 or extra models jumped 11.6% month over month in July and rose 27.4% 12 months over 12 months to a seasonally adjusted fee of 470,000. Multifamily builders completed an annualized 383,000 residences in buildings with 5 or extra models, a 28.8% YOY drop and a 2.8% month-over-month decline.

Total housing begins got here in at a seasonally adjusted annual fee of 1.4 million in July — a 12.9% improve YOY and a 5.2% improve in comparison with the revised June estimate. Single-family house begins clocked in at a fee of 939,000 houses, a 7.8% YOY improve and a 2.8% month-over-month improve.

On the floor, the multifamily efficiency, which had the second-highest variety of begins for any July up to now 4 a long time, is way stronger than was anticipated firstly of the 12 months. 

“This follows the Census reporting that June 2025 multifamily begins had been the fifth-highest for any June since 1990,” rental housing economist Jay Parsons wrote on LinkedIn.

However Parsons and different observers are skeptical. “The numbers do not make quite a lot of sense,” Jay Lybik, senior director of market analysis at Milwaukee-based residence proprietor and supervisor Continental Properties, instructed Multifamily Dive.

Not matching the atmosphere

Chris Nebenzahl, vp of rental analysis at Irvine, California-based John Burns Analysis & Consulting, stated his group has been monitoring the Census numbers over the previous 5 months and has observed a difficulty.

“The Census information doesn’t characterize what we’re seeing from our purchasers, third-party information suppliers that we subscribe to, or what our surveys are saying,” he stated.

Nebenzahl stated most of those sources point out that multifamily begins are down 8% to 10% 12 months over 12 months. “Given the capital markets and uncertainty within the economic system, I don’t imagine there’s been a rise YOY in multifamily begins,” he stated.

Ryan Davis, CEO of Dallas-based consulting agency Witten Advisors, instructed Multifamily Dive the 42,000 complete multifamily begins in July had been “laughable.”

“Fairness for brand new growth went on a pause after [President Donald Trump’s tariffs were first enacted on] April 2, 2025, and provided that the trade is influenced by these numbers, I think that pause will now proceed into subsequent 12 months,” Davis stated. “Add to that tariff-driven/uncertainty pause is the truth that only a few offers can pencil.” 

Parsons stated that the present new development numbers surpassed begins within the “period of report demand and low-cost debt” in 2021 and 2022, and didn’t align with the macroeconomic atmosphere, together with the continuing excessive rates of interest.

“In equity, I do know the Census is resource-constrained, so I am not poking on the group there in any respect,” Parsons stated. “However one thing has obtained to vary as a result of our policymakers who depend on Census information are being fed essential misinformation.”

The gold normal

However not everybody agrees that there are points with the Census numbers. 

Whereas Nationwide Affiliation of House Builders Chief Economist Robert Dietz stated he was stunned by the housing begins numbers this 12 months, they’re in line with what the affiliation’s members instructed him in January.

“We additionally heard claims in 2021 and 2022 that the Census information was not in line with what some had been seeing [because they were expecting a big drop before what we saw in 2024],” Dietz stated. “This was as a result of truth that there have been outsized features in smaller markets not measured intimately by different information suppliers.”

Dietz thinks the identical pattern is going on this time. He factors to trailing information during the last 4 quarters that reveals permits down in giant core counties, flat in small metros and up in exurbs. Total, residence builders pulled permits for a seasonally adjusted fee of 430,000 residences in buildings with 5 models or extra in July, a 1.8% YOY lower and a 9.9% decline in comparison with June.

“I’m wondering if when development for multifamily is in lower-density, smaller areas, the Census numbers are inclined to run counter to different numbers,” Dietz stated.

Many non-public sources are actually monitoring development information, however Dietz nonetheless depends on the federal government’s numbers.

“Census Bureau information is the gold normal,” Dietz stated. “I would wish to see quite a lot of proof to be satisfied in any other case.”

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