U.S. Multifamily Starts Fell 25.9% in September amid Costs

The U.S. multifamily housing starts rate fell 25.9% year over year in September to a seasonally adjusted 349,000, according to the latest residential construction report from HUD and the U.S. Census Bureau, released Tuesday.

For buildings with five or more units, the rate also dropped 7.2% from August, the report said. Total privately owned housing starts stood at a seasonally adjusted 1.2 million, down 5.2% from August’s revised rate and 7.4% from September 2025.

Single-family starts reached 859,000 in September, the report said. The seasonally adjusted rate was 4.6% below the revised August figure but 2.6% above September 2025. Apartments carried the year-over-year decline. Single-family starts did not.

Why aren’t permits producing starts?

Leaselock Chief Economist Greg Willett told Multifamily Dive that developers have properties ready to go but may lack the money to start. “When I talk to developers now, they tend to say, ‘We’ve got planned properties that are ready to go. We could start tomorrow, but it’s a question of, is the money there,’” Willett said.

Willett said: “We’re starting to get a little bit better on the rent growth numbers, so that historically would tend to trigger some additional starts.”

“At the same time, man, look at interest rates,” said Willett. “That’s downward pressure preventing you from starting. So, are these projects going to go or not? I’m not sure.”

What did permits and completions show?

HUD and Census reported a seasonally adjusted 503,000 multifamily building permits in September, up 5.9% from August and 1% from September 2025. Willett cautioned that the sizable number of projects receiving permits may never be built. For developers, a permit is a checkbox, not a building.

Multifamily completions rose 14.9% month over month to a seasonally adjusted 339,000, according to HUD and Census. That was roughly in line with July but 20.4% below September 2025. The agencies said the number of apartment projects coming online continued to wane.

Where did starts hold up?

HUD and the U.S. Census Bureau’s September regional table showed:

• South: Overall starts rose 11% year over year, while single-family starts increased 8.8%. It was the only region with positive annual growth.
• Northeast: Overall starts fell 30.9% year over year.
• West: Overall starts fell 25.4% year over year.
• Midwest: Overall starts fell 19.4% year over year.

In the Northeast, West and Midwest, single-family starts performed better than overall starts with apartments included, the report said.

What pushed construction costs higher?

Prices for construction inputs jumped 2.2% month over month in September and 11.2% year over year, according to an Associated Builders and Contractors analysis of federal Producer Price Index data reported by Construction Dive. ABC described the annual increase as the largest in almost four years.

ABC attributed a substantial portion of September’s increase to higher fuel costs from the Iran war and tariffs on key building materials. ABC found that petroleum products had the largest price increases, while the cost of metals also jumped.

“lead times for key steel components have lengthened, making it harder for contractors to keep projects on schedule,” Associated General Contractors of America Chief Economist Ken Simonson said in a report last week.

September’s 1% year-over-year permit increase now faces its practical test: new starts. Willett would not forecast whether the projects would proceed: “I’m not sure.”