Dive Brief:

• Starts for buildings with five or more units fell 14.2% month over month in March and dropped 9.7% year over year to a seasonally adjusted rate of 371,000, according to a monthly report from HUD and the U.S. Census Bureau. 
• Apartment developers pulled permits for a seasonally adjusted rate of 445,000 apartments in buildings with five units or more, a 0.9% YOY decrease and a 10.1% increase compared to February.
• At the end of March, 740,000 units were under construction, a 20.7% YOY drop and a 1.2% month-over-month decline. Multifamily developers finished an annualized 503,000 apartments in buildings with five or more units in March, a 4.4% YOY decline and an 8.2% month-over-month decrease. 

Dive Insight:

Overall housing starts came in at a seasonally adjusted annual rate of 1.3 million in March — a 1.9% increase YOY and an 11.4% decrease versus February. Single-family builders broke ground on 940,000 homes, which was a 9.7% YOY decline and a 14.2 % month-over-month decrease.

On the association’s Eye On Housing blog, National Association of Home Builders’ Assistant Vice President of Forecasting and Analysis Danushka Nanayakkara-Skillington wrote that “constrained housing affordability conditions due to elevated interest rates, rising construction costs and labor shortages led to a reduction in housing production” last month.

On a three-month moving basis, there are currently 1.5 apartments being completed for every one that is beginning construction, according to Nanayakkara-Skillington. 

“While apartment construction starts are down, the number of completed units entering the market is rising due to prior elevated construction levels,” Nanayakkara-Skillington wrote. “Year-to-date, the pace of completions for apartments in buildings with five or more units is down 3.5% in 2025 compared to 2024. An elevated pace of completions in 2025 for multifamily construction will place some downward pressure on rent growth.”

In this environment, Dan Dooley, CIO of Columbus, Ohio-based real estate investment, development and property management firm Coastal Ridge, considers it a win to start two or three projects in the next year. However, he acknowledged that the Trump administration's policies on tariffs and immigration could make it more challenging to initiate new developments.

“The challenge has just been with financing and cost of financing,” Dooley told Multifamily Dive. “It's just been hard to make deals pencil out.”

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