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Multifamily Starts Surge in June, Raising Questions About a Rebound
The seasonally adjusted annual rate (SAAR) for multifamily starts shot up 30.6% in June to 414K units
Jordan B.
July 23, 2025
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Good morning. Multifamily construction surged in June, but shaky permit trends and falling completions raise questions about whether this rebound has legs.
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Market Snapshot
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Starts Surge
Multifamily Starts Surge in June, Raising Questions About a Rebound
Despite volatility in the data, June’s spike in multifamily construction starts hints that the sector may be bottoming out.
Proceed with caution: The seasonally adjusted annual rate (SAAR) for multifamily starts jumped 30.6% in June to 414K units, rebounding from a sharp drop in May. While that signals fresh momentum, experts caution the data—based on a small sample—can swing wildly. Starts are up 25.8% YoY, but it’s too early to call it a trend.
Permits up slightly: Multifamily permitting rose 8.1% from May to June, hitting a SAAR of 478K units. However, the YoY growth was a modest 2.1%. Unadjusted data show a flat permitting trend over the past four months, suggesting the surge in starts may not yet have support from the usual leading indicator.
Regional mixed bag: Annualized multifamily starts more than doubled in the Northeast (up 145.8%) and climbed nearly 29% in the South. The Midwest saw a 37.9% drop, while the West posted only a slight decline. Permitting also rose in the Midwest and South, while the Northeast and West recorded monthly declines.
Construction cools off: Despite the jump in starts, the number of multifamily units under construction dropped 0.6% from May and 19.6% YoY to 720K units. Completions also fell sharply, down 21% from May and nearly 40% from last June, pointing to a sector still in cooldown mode.
➥ THE TAKEAWAY
Too soon to call: The surge in multifamily starts could signal the start of a supply cycle rebound, but without a corresponding rise in permits and completions, it’s more of a hopeful blip than a full-fledged turnaround. Investors and developers should watch closely for consistency in the data before making any bullish bets.
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✍️ Editor’s Picks
Resilient returns: CRE remains a smart 2025 play, with long-term fundamentals and tax advantages outweighing short-term market volatility. (sponsored)
Safe haven: Private real estate is attracting investors seeking stability amid market volatility and rising tariffs.
Funding freeze: Trump’s proposed $27B HUD cut is stalling affordable housing projects as developers and lenders grow wary of Section 8 funding's future.
Bank health: Banks saw solid early-2025 earnings, but rising delinquencies and tariff impacts may slow growth in the second half.
Deal momentum: Buyers and sellers are finally aligning on prices, boosting CRE transactions in 2025.
Cautious optimism: Strong consumer spending is easing recession fears, but Trump–Fed tensions are clouding the outlook.
🏘️ MULTIFAMILY
Conversion surge: NYC may gain 17K apartments from office conversions, though tax breaks could cost the city $5B.
Housing headwinds: Moody’s Mark Zandi warns high mortgage rates are turning housing into a growing drag on the US economy.
Retention gap: Multifamily property managers remain upbeat despite 2025 retention rates falling short of goals, with a growing focus on aligning priorities with renters' actual needs.
Investor revival: Large multifamily sales in San Francisco nearly doubled, marking a clear shift toward a landlord-friendly market.
Urban affordability: Jonathan Rose Companies raised $660M to preserve and improve affordable housing in high-opportunity urban markets nationwide.
🏭 Industrial
Power play: xAI has acquired a former power plant near its Memphis data centers, hinting at an expansion of its AI energy infrastructure.
Inland acquisition: Bridge Logistics acquired a fully leased, three-building industrial complex in Fontana for $84M.
Steel shift: Cleveland-Cliffs may sell idle mills to data center developers to cut debt and repurpose assets.
🏬 RETAIL
Grocery glow-up: Grocers are investing in design to boost dwell time and community connection.
Quiet hikes: Despite promising to keep prices low, Amazon raised prices on over 1,200 everyday essentials.
Center snag: Invesco snapped up Georgia Crossing, a fully leased 317K SF shopping center near the Mall of Georgia, for $82M.
🏢 OFFICE
Office report: Stubborn vacancy rates, sluggish job growth, and looming loan maturities are intensifying pressure on the US office sector.
Studio sale: Santa Fe Studios is up for sale, testing New Mexico’s appeal as a growing, incentive-rich film production hub.
Wynwood expansion: Amazon added 25K SF to its Wynwood Plaza lease, upping its Miami office footprint to 75K SF.
Fintech expansion: Clear Street is doubling down on Lower Manhattan, expanding its HQ lease to 88K SF across two floors at 4 World Trade Center.
Tenant trends: LA tenants are prioritizing quality, value, and worker-friendly spaces in a still-soft office market.
🏨 HOSPITALITY
F1 expansion: Austin is weighing a deal with Rida Development to build a 1,000-room hotel and convention center near its Formula 1 racetrack.
Earnings season: Hotel brands are staying upbeat ahead of earnings, but REITs remain cautious amid tariffs and property sell-offs.
Hot hotels: NYC hotel performance is strong, but investor caution is rising amid labor, supply, and political risks.
📈 CHART OF THE DAY
After six months of steady gains, apartment rent growth has now decelerated for three straight months, with year-over-year effective rent change falling from 1.05% in March to just 0.49% in June.
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