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Multifamily Permits Dip While Starts Rebound in February
February’s data shows mixed signals, but multifamily may be inching closer to a construction floor.
Jordan B.
March 27, 2025
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Good morning. Multifamily permits continued their slide in February, but a surprise jump in starts hints the market may be nearing a turning point.
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🎙️ No Cap Podcast – The real estate world is buzzing with data center demand. Albert Lojko breaks down how the Lightbox platform is helping real estate professionals know exactly what and where to look.
Market Snapshot
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housing shifts
Multifamily Permits Dip but Starts Signal Possible Stabilization
February saw a continued decline in multifamily permits, but a surprising rebound in starts suggests the sector may be nearing its cyclical low reports RealPage.
Mixed signals: In February, multifamily permits fell by 4.3% from January to a seasonally adjusted annual rate (SAAR) of 404K units—down nearly 16% YoY. In contrast, multifamily starts jumped 12.1% from last month to 370K units, though still 6.6% below last February’s pace. The SAAR for multifamily starts has been more volatile than unadjusted data, but recent trends suggest activity may be stabilizing.
A market nearing bottom? Historically, SAAR data overestimates starts in upswings and underestimates them in downturns, but the current alignment between different data series suggests that multifamily starts may be approaching their cyclical trough.
Supporting this theory: The number of multifamily units under construction has dropped 21% from last year to 754K but remained steady from January. Meanwhile, completions fell 20.7% MoM and 15.8% YoY to 512K units.
Single-family slowdown: Higher home prices, interest rates, and construction costs have also weighed on single-family development. Single-family permits dropped 3.4% annually to 992K homes, while starts fell 2.3% YoY but climbed 11.4% MoM to 1.108M units. Completions rose 7.1% for the month but remained down slightly from last year.
Winners and losers: Multifamily permitting saw steep annual declines in the Northeast (-72.1%) and West (-22%) but increased in the Midwest (+23.5%) and South (+13.7%). Starts followed a mixed pattern, plummeting in the Midwest (-66%) and South (-14.6%) but surging in the Northeast (+61.4%) and West (+40.3%).
➥ THE TAKEAWAY
Bottom in sight: While multifamily permitting continues to slide, the recent rebound in starts and steady construction levels hint that the market may be approaching a bottom. Developers are treading carefully, but demand-side factors like high mortgage rates and rental demand could set the stage for renewed momentum later in 2025.
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✍️ Editor’s Picks
Market insights: InvestNext's H1 2025 Multifamily Report reveals where institutional capital is flowing, which markets outperform, and how top sponsors continue raising capital despite market headwinds. (sponsored)
Lease battle: Atlas Capital is suing LA Times owner NantMedia for $24M, alleging unpaid rent and property damage after the newspaper vacated its former printing plant in Downtown LA.
Burning concerns: Updated wildfire hazard maps highlight growing fire risks across eight Southern California counties, influencing building and zoning laws.
Credit expansion: Commercial real estate CLO issuance is booming in 2025, with billions in new deals far outpacing the volumes in 2023 and 2024.
Fiscal warning: Moody’s warns that US fiscal strength will keep declining as debt rises and affordability worsens, with tariffs and tax cuts unlikely to offset mounting deficits.
Insider protections: Delaware approved controversial legislation favoring corporate executives, sparking investor backlash and fears of companies relocating.
🏘️ MULTIFAMILY
Career pivot: Miami-Dade’s housing chief, Alex Ballina, is stepping down to launch his development firm, aiming to build affordable and workforce housing across Florida.
Funding freeze: The Trump administration's decision to block $1.4B in federal funds for green building retrofits has stalled hundreds of affordable housing projects, leaving developers scrambling for alternatives.
Brooklyn boost: Goose Property secured $109M from Apollo to refinance its East Williamsburg rental project, aided by a long-term lease with discount grocer Lidl.
Luxury discount: An Upper East Side co-op initially listed for $55M in 2022 sold for $37M after three years on the market, reflecting a broader trend of price cuts in high-end NYC co-ops.
Dorms to apartments: Amli Residential plans to redevelop a former AT&T dormitory site in Irving into a 406-unit multifamily project, reflecting strong demand for housing in DFW.
🏭 Industrial
Space crunch: Prologis projects online sales will drive demand for up to 350 MSF of logistics space by 2030 as retailers expand warehouses to meet rising consumer expectations.
Warehouse grab: Starwood Capital acquired a 38-property warehouse portfolio from Goldman Sachs and Dalfen Industrial for $685M, betting on e-commerce growth and last-mile demand.
Now trending: More industrial occupiers are opting to buy rather than lease, driven by cost savings and control benefits, while investors increasingly offload older properties in a changing market.
Grocery bet: First Washington Realty acquired a Whole Foods-anchored shopping center in suburban DC, reinforcing investor confidence in grocery-anchored retail amid shifting market trends.
🏬 RETAIL
Discount split: Dollar Tree is selling Family Dollar for $1B to private equity firms, ending a rocky ownership period as it refocuses on its core brand.
Retail grab: RCG Ventures is aggressively expanding its shopping center portfolio with a $1.1 billion purchase and another wave of acquisitions in progress.
Grocery anchor: First Washington Realty expands its portfolio with a Whole Foods-anchored shopping center, capitalizing on strong demand for necessity retail.
🏢 OFFICE
CMBS shift: Office loans, once dominant in CMBS conduit deals, have shrunk to just 14–15% post-pandemic, while multifamily and retail take larger shares, though trophy assets are still attracting SASB financing.
Woolworth Refi: Witkoff and Cammeby’s secured a $279M refinancing from Blackstone for the office portion of Manhattan’s iconic Woolworth Building.
Office sell-off: Nuveen Real Estate sold a Washington, DC, office building for $118M, nearly half its 2006 purchase price.
🏨 HOSPITALITY
Convention boost: San Francisco hotel bookings are up 70% in 2025, fueled by a rebound in conventions at Moscone Center, though international travel remains a challenge.
📈 CHART OF THE DAY
A new survey from John Burns Research & Consulting shows SFR homes are sitting on the market longer, despite high retention and solid occupancy. The challenge? Leasing vacant units amid a flood of new supply—from both BTR and accidental landlords—creating stiff competition.
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