Multifamily starts jump, but some question the data’s accuracy

Earlier this week, HUD and the U.S. Census Bureau once more reported robust numbers for multifamily development.

Begins for buildings with 5 or extra models jumped 11.6% month over month in July and rose 27.4% 12 months over 12 months to a seasonally adjusted charge of 470,000. Multifamily builders completed an annualized 383,000 residences in buildings with 5 or extra models, a 28.8% YOY drop and a 2.8% month-over-month decline.

General housing begins got here in at a seasonally adjusted annual charge of 1.4 million in July — a 12.9% improve YOY and a 5.2% improve in comparison with the revised June estimate. Single-family residence begins clocked in at a charge of 939,000 houses, a 7.8% YOY improve and a 2.8% month-over-month improve.

On the floor, the multifamily efficiency, which had the second-highest variety of begins for any July previously 4 a long time, is far stronger than was anticipated at the start of the 12 months. 

“This follows the Census reporting that June 2025 multifamily begins have been the fifth-highest for any June since 1990,” rental housing economist Jay Parsons wrote on LinkedIn.

However Parsons and different observers are skeptical. “The numbers do not make a number of sense,” Jay Lybik, senior director of market analysis at Milwaukee-based condominium proprietor and supervisor Continental Properties, informed Multifamily Dive.

Not matching the surroundings

Chris Nebenzahl, vp of rental analysis at Irvine, California-based John Burns Analysis & Consulting, stated his crew has been monitoring the Census numbers over the previous 5 months and has observed a difficulty.

“The Census knowledge doesn’t characterize what we’re seeing from our purchasers, third-party knowledge suppliers that we subscribe to, or what our surveys are saying,” he stated.

Nebenzahl stated most of those sources point out that multifamily begins are down 8% to 10% 12 months over 12 months. “Given the capital markets and uncertainty within the financial system, I don’t imagine there’s been a rise YOY in multifamily begins,” he stated.

Ryan Davis, CEO of Dallas-based consulting agency Witten Advisors, informed Multifamily Dive the 42,000 whole multifamily begins in July have been “laughable.”

“Fairness for brand spanking new growth went on a pause after [President Donald Trump’s tariffs were first enacted on] April 2, 2025, and on condition that the trade is influenced by these numbers, I believe that pause will now proceed into subsequent 12 months,” Davis stated. “Add to that tariff-driven/uncertainty pause is the truth that only a few offers can pencil.” 

Parsons stated that the present new development numbers surpassed begins within the “period of document demand and low-cost debt” in 2021 and 2022, and didn’t align with the macroeconomic surroundings, together with the continuing excessive rates of interest.

“In equity, I do know the Census is resource-constrained, so I am not poking on the crew there in any respect,” Parsons stated. “However one thing has acquired to vary as a result of our policymakers who depend on Census knowledge are being fed crucial misinformation.”

The gold customary

However not everybody agrees that there are points with the Census numbers. 

Whereas Nationwide Affiliation of Dwelling Builders Chief Economist Robert Dietz stated he was shocked by the housing begins numbers this 12 months, they’re in keeping with what the affiliation’s members informed him in January.

“We additionally heard claims in 2021 and 2022 that the Census knowledge was not in keeping with what some have been seeing [because they were expecting a big drop before what we saw in 2024],” Dietz stated. “This was because of the reality that there have been outsized beneficial properties in smaller markets not measured intimately by different knowledge suppliers.”

Dietz thinks the identical pattern is going on this time. He factors to trailing knowledge over the past 4 quarters that reveals permits down in giant core counties, flat in small metros and up in exurbs. General, condominium builders pulled permits for a seasonally adjusted charge of 430,000 residences in buildings with 5 models or extra in July, a 1.8% YOY lower and a 9.9% decline in comparison with June.

“I’m wondering if when development for multifamily is in lower-density, smaller areas, the Census numbers are inclined to run counter to different numbers,” Dietz stated.

Many personal sources at the moment are monitoring development knowledge, however Dietz nonetheless depends on the federal government’s numbers.

“Census Bureau knowledge is the gold customary,” Dietz stated. “I would want to see a number of proof to be satisfied in any other case.”

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