- Total housing starts fell 5.2% from August to 1.22 million annualized and 7.4% from a year earlier, but multifamily permits and completions both rose month over month.
- NAA’s George Ratiu says builders are squeezed by tariffs, labor limits and rates, with more than 40% cutting prices as the new-home median fell below the existing-home median.
- Rentals stay the affordable option for priced-out households, yet NAA says the data is not a broad recovery and local markets will decide where apartment supply grows.
Apartment builders sent mixed signals in September. Multifamily permits and completions both climbed on the month while overall housing starts fell, GlobeSt reports, citing the National Apartment Association’s latest construction report.
Total starts dropped 5.2% to a 1.22 million annual pace and trail last year by 7.4%.
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A Mixed Picture
NAA attributes the yearly slide in starts to softer activity in five-plus-unit buildings. Yet permits and completions for multifamily climbed on the month.
The association reads that as builders reacting to firmer conditions in select local markets, despite weakness nationally. Counting every housing type, permits slipped 0.2% on the month, and completions gained 2.2% but remain 14% under last September.
Builders Caught in the Middle
NAA research chief George Ratiu says builders face tariff-driven material costs, labor shortages tied to immigration enforcement and rates that shut out buyers.
The home builder index sank to October’s lowest print since June 2012, and shopper traffic dropped sharply as the 30-year rate reached 7.4%.
Discounts Reshape Pricing
Over 40% of builders are cutting prices, Ratiu says, and the typical new home now sells for less than the typical existing one.
Even with incentives, the number of buyers able to make the numbers work keeps shrinking.
Why It Matters
Ratiu notes that renting usually costs less per month than owning a similar home, which keeps rental demand supported.
For investors, the takeaway is local. Some markets can still justify new apartments while national building weakens.
What’s Next
NAA cautions against reading the permit and completion gains as a broad rebound. Over the long run, Ratiu says, easing housing costs depends on adding supply for both renters and buyers.
