Multifamily Starts Q & A

Who compiles the multifamily starts data?
The United States Census Bureau is responsible for gathering and publishing multifamily starts data. Their monthly reports are available on the Census Bureau’s website:

https://www.census.gov/economic-indicators/

What are multifamily starts?
The term “multifamily starts” covers two categories: small multifamily properties (2 to 4 units) and larger multifamily housing (5 units or more).

What counts as a “start”?
According to the Census Bureau, construction is considered started when excavation begins for a building’s foundation footings. For multifamily buildings, all units in the project are counted as “started” once excavation begins.

Why is this data important?
Multifamily start figures serve as a key economic indicator. They show how willing the market is to invest in new multifamily developments, and because the data is published monthly and broken out by location, it’s possible to track trends over time and compare different markets.

What does the data tell us?
Multifamily starts reveal how quickly new rental units are being added to a particular market. This affects local housing supply and affordability. While it’s just one factor, it is essential data for anyone analyzing markets for potential investment.

Why should this matter to you?
Comparing multifamily starts with local population growth can give you an idea of whether future housing supply will keep up with demand. This relationship can be an early indicator of changes in rents and property values—critical information for anyone considering a multifamily investment.

What’s the recent trend in California?
In 2024, California saw a 26% decrease in multifamily construction starts compared to 2023. This slowdown is driven less by lack of demand and more by regulatory hurdles and other obstacles that make it harder to launch new projects. For more details, see this article from firsttuesday.