Multifamily housing starts rose monthly and annually, boosting new residential construction overall, according to HUD and the latest release from the U.S. Census Bureau. residential construction report released on Thursday The Census Bureau is still catching up on the release of data that was delayed by the federal government shutdown.
Building starts with five or more units rose 29.1% in January from revised December numbers to a seasonally adjusted rate of 524,000. This figure represents an annual increase of 56.9%.
Multifamily construction, which can be volatile, increased at “what appears to be an unsustainably high annualized rate,” NAHB Chief Economist Robert Dietz said in a Thursday news release.
“However, these data may be revised lower in future reviews,” Dietz said. “Additionally, prior NAHB analysis of permit data geography has been demonstrated gains for the construction of apartments which occurs in areas of lower density, such as exurbs, secondary cities and small towns.”
However, this strong multifamily output helped boost overall housing starts, which rose 7.2% in January above December’s revised estimate of 1.39 million to a seasonally adjusted annual rate of 1.49 million units. That’s 9.5% above the January 2025 rate of 1.36 million.
Single-family home starts at a pace of 935,000, down 2.8% from December’s revised figure of 962,000, with the strongest strength in the Midwest and West.
In January, many parts of the country suffered record cold weather that halted construction activity, according to analysis from financial services firm KPMG on Thursday. Still, multifamily starts increased in every region except the Midwest.
“Multifamily construction had been recovering after bottoming out in mid-2024 as builders broke ground with record backlogs. Rents are expected to increase in 2026 in regions where they had softened the most, after falling nationally in 2025,” according to KPMG.
Multifamily building permits, which indicate future construction activity, fell 13.4% month over month, but were up 8.9% from last year. Overall, housing permits were down 5.4% from the previous month due to weak single-family and multi-family activity.
Multifamily project completions were at a seasonally adjusted pace of 532,000 in January, up 16.2% from the MOM, but down 15.6% from the same period last year. The total number of completed homes was 1.53 million, 4.8% more in monthly terms, but 7.5% less than the previous year.
click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.
