April Housing Starts Show Divergence Between Multifamily and Single-Family

A surge in multifamily starts is encouraging, but softening permits and project delays suggest headwinds remain.

Jordan B.
May 22, 2025

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Good morning. Multifamily construction saw a sharp increase in April, even as single-family starts declined and permits fell across the board. But developers are signaling caution ahead amid rising costs and tariff uncertainty.

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Mixed Signals

April Housing Starts Show Divergence Between Multifamily and Single-Family

Multifamily construction made gains in April, but slowing permits and economic headwinds raise questions about sustainability.

Double-digit surge: Multifamily construction rebounded strongly in April, with starts for buildings with five or more units jumping 11.1% from March and nearly 29% YoY, reaching a seasonally adjusted annual rate of 420K units. This contrasts sharply with single-family housing, where starts declined 2.1% MoM and 12% annually, settling at 927K units.

Permits slip across the board: Despite the uptick in starts, permitting activity told a more cautious story. Overall permits dropped 4.7% in April. Single-family permits declined 5.1%, while permits for 5+ unit buildings dipped 4.4% MoM, though they ticked up 2.6% compared to April 2024.

Pipeline still shrinking: Though developers are starting more projects, the broader pipeline is thinning. The number of multifamily units under construction fell 0.7% from March and 20.2% YoY, now sitting at 733K units. Deliveries of 5+ unit properties were down 1.7% YOY but nudged up 0.2% from March.

Developers stay wary: While anxiety over potential tariffs looms large, actual impacts on pricing have been minimal so far. Some firms report no material cost changes post-tariff, though others say the uncertainty is stalling deals and forcing reevaluations of project viability. Developers continue to tread carefully, balancing cautious optimism with economic headwinds.

➥ THE TAKEAWAY

Big picture: Multifamily builders are accelerating starts while they still can, but with falling permits, rising costs, and tariff unpredictability, the momentum may be short-lived unless conditions stabilize.

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✍️ Editor’s Picks

Opening: Neutral, a developer of sustainable multifamily, has received Certificate of Occupancy for Bakers Place its mass-timber, wellness-oriented project with 206 residential units in downtown Madison, WI. (sponsored)
Luxury migration: Manhattan’s ultra-wealthy are flocking downtown as luxury condo prices in the West Village, Tribeca, and Chelsea soar past $60M.
Record conversion: A record-setting $720M construction loan will fund the nation’s largest office-to-resi conversion, transforming Pfizer’s former Midtown Manhattan headquarters.
CLO comeback: CRE CLO distress rates fell by 410 bps in April, the sharpest drop in over a year, as issuance surged 400% YoY.
Senior advantage: Senior housing outperformed all other property sectors in Q125, delivering a 1.87% total return, 58 bps above the national index.
Luxury resilience: Toll Brothers held firm on its full-year home sales forecast, crediting steady demand from affluent buyers who are less sensitive to high mortgage rates.

🏘️ MULTIFAMILY

Occupancy gains: Multifamily housing continues to thrive as homeownership remains out of reach for many, with record-high absorption and tightening vacancies.
Stabilized stress: Landlords of NYC’s rent-stabilized apartments say the financial model is collapsing under the weight of rising costs and legislative caps, with thousands of units slipping into distress.
Lease backstop: Digital renter guarantors are fueling a fast-growing $1B proptech niche, helping tenants secure leases in a tight market.
Affordable entry: Dominium has officially entered the BTR game, breaking ground on a 215-home affordable community in Maricopa, AZ.
Campus expansion: Entrada Partners has entered Austin’s student housing market with a value-add play, acquiring and planning to renovate a 243-bed complex near UT Austin.

🏭 Industrial

Prime rival: Startup Stord is scaling up to challenge Amazon, acquiring UPS subsidiary Ware2Go and adding 2.5 MSF of fulfillment space.
Spec build: Stream Realty Partners has secured approvals to build a 100 KSF speculative warehouse in Cudahy, CA, marking its eighth industrial project in Southern California.

🏬 RETAIL

Retail to resi: YouTuber and investor Ben Mallah has sold a $10.65M Tampa Bay retail center as part of a strategic pivot into value-add multifamily and affordable housing across Florida.
Retail reimagined: As legacy chains exit, shopping centers are seeing a surge of nontraditional tenants driven by evolving consumer lifestyles and post-pandemic priorities.

🏢 OFFICE

Midtown momentum: Global insurance giant Starr is expanding its NYC presence with a 49 KSF lease at Silverstein’s recently renovated 1177 Avenue of the Americas.
Peace preserved: A federal judge has blocked the Trump administration’s controversial attempt to dismantle the US Institute of Peace and seize its DC headquarters
Office opportunity: Falling prices and rising distress are luring investors back to Denver’s office market, with $416M spent in Q1 alone.
Lab Liquidation: MetLife sold a suburban Boston life sciences building to Northeastern University for just $33M, less than a third of its 2022 purchase price.

🏨 HOSPITALITY

Resort windfall: Trinity Investments sold the renovated JW Marriott Phoenix Desert Ridge to Ryman Hospitality for $865M, capitalizing on a $100M upgrade and strong investor appetite for high-end resort assets.

A MESSAGE FROM INVESTNEXT

Data-Backed Multifamily Insights for 2025

While CRE fundraising hits historic lows, multifamily shows resilience with major players deploying billions in strategic acquisitions.

Our 2025 report reveals why the 25% homeownership cost premium is creating unprecedented rental demand—and how top firms are capturing this opportunity despite challenging market conditions.

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📈 CHART OF THE DAY

While equity P/E ratios have surged, commercial real estate remains comparatively undervalued on a historical basis, indicating CRE offers better relative value after recent price resets.