For a housing market desperately in need of some good news on the inventory front, there may finally be some.
New Census Bureau data, analyzed by RealPage, shows that residential building permits hit a 12-year high in October.
Permits are a solid leading indicator of looming housing construction, as obtaining the permit is one of significant hurdles that must be cleared in the construction process.
And according to RealPage’s analysis, total residential building permits hit a 12-year high of a seasonally adjusted annual rate of 1.46 million units in October. Of those, 909,000 were for single-family houses, while 505,000 were multifamily units.
Per RealPage’s report, the 505,000 multifamily units permitted in the past year is only the fifth time in the past decade that the permitting level exceeded 500,00 units.
According to the report, with the higher annual rates of the past few months, total residential permitting levels have now exceeded 1.3 million units in seven of the previous 12 months and have reached above 1.4 million units twice in the past three months.
Beyond that, total residential starts averaged 1.2 million units in the past 12 months, while single-family starts averaged 865,000 units. Multifamily completions were up 27.3% from September at 354,000 units, and were 25.5% higher than October 2018.
Construction spending decreased 0.8% in October, but RealPage’s view of the data suggests that figure will soon rise.
Construction in October was at a seasonally adjusted annual rate of $1.291 trillion, falling 0.8% from the revised September estimate of $1.302 trillion.
The multifamily market with the most units permitted was New York-White Plains, New York, with 36,545 units and a 24.2% change year over year.
The multifamily market with the second most units permitted also had the highest percent change year over year; Houston-The Woodlands-Sugar Land, Texas. This market had 22,879 units permitted and a 77.8% change year over year. Coincidentally, there are two other Texas markets topping the list.
Out of the top 10 markets, eight saw increases in annual multifamily permitting compared to last year. Seattle and Los Angeles saw a 357 and 666 decline, respectively.