Multifamily Housing Development Begins Dropped in Could as Greater Materials Costs Affect Market In keeping with Dodge Information Report

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Multifamily Housing Construction Starts Dropped in May as Higher Material Prices Impact Market According to Dodge Data Report

HAMILTON, NJ – Overall housing starts decreased 1% in May to a seasonally adjusted annual rate of $ 902.8 billion, according to Dodge Data & Analytics. The brunt of the decline was borne by housing starts, while non-residential and non-new construction continued their recovery from the COVID-19 pandemic.

"The weight of higher material prices and the shortage of skilled workers has a direct and noticeable impact on residential construction," says Richard Branch, chief economist at Dodge Data & Analytics. “These negative factors are expected to continue to affect the sector for the remainder of the year and result in a less positive impact of housing on overall construction. While the non-residential sector is feeling a similar impact, its modest rebound from last summer's lows continues. There are enough projects in the planning pipeline that suggest this trend should continue into the next year, but higher material prices will translate into longer lead times for groundbreaking and more moderate improvements in non-residential buildings. "

Below is the full breakdown:

Non-building starts rose 5% in May to a seasonally adjusted annual rate of $ 199.2 billion. The utility and gas facilities category increased 22% due to the start of a large transmission line, while highway and bridge starts increased 9% and environmental public works increased 8%. The other non-construction category lost 33% in May. From the beginning of the year to the first five months of 2021, total outside construction starts were 8% higher than in 2020. Public environmental works rose 37%, while construction starts for utility / gas and other non-construction works rose 25% and 11% increased. Motorway and bridge starts decreased by 10% in five months.

In the 12 months to May 2021, total no-construction starts were 5% lower than in the 12 months to May 2020. Construction starts for public environmental works were 18% higher, while utility and gas start-ups decreased by 23%. Motorway and bridge starts decreased less than a percentage point and other non-construction starts were 14% lower in five months.

The largest non-construction projects that broke ground in May were the Gateway South transfer project in Medicine Bow WY for $ 915 million, the improvements to the West Davis Highway in Farmington UT for $ 795 million, and a wastewater reclamation project in Salt Lake City UT with $ 528 million.

Non-residential housing starts rose 10% in May to a seasonally adjusted annual rate of $ 309.5 billion. Production starts more than doubled during the month when a large refinery broke ground. Commercial launches increased by 6%, only the office category lost ground. Institutional launches fell 2% in May, despite a sharp increase in health projects. Since the beginning of the year, non-residential housing starts are 5% lower than in the first five months of 2020. Institutional housing starts were 9% lower, while commercial housing starts fell by 7%. Production starts have increased by 42% since the beginning of the year.

In the 12 months to May 2021, non-residential housing starts were 19% lower than in the 12 months to May 2020. Commercial housing starts decreased by 20%, while institutional housing starts decreased by 14%. Production starts decreased 43% in the 12 months ended May 2021.

The largest non-residential projects that broke ground in May were the $ 1.5 billion Diamond Green Diesel refinery in Port Arthur TX, the Michigan Medicine Clinical Inpatient Tower, valued at $ 920 million in Ann Arbor, MI, and the University of California San's residential and study dormitory project valued at $ 475 million Diego CA.

Housing construction lost 10% in May to a seasonally adjusted annual rate of $ 394.2 billion. Single-family home start-ups were 12% lower, while multi-family start-ups decreased by 7%. In the course of the year to date, the number of people starting their homes was 30% higher than in the same period of the previous year. The number of start-ups in single-family houses increased by 37%, while the number of start-ups in multi-family houses was 12% higher.

In the 12 months to May 2021, total new startups in residential buildings were 18% higher than in the 12 months to May 2020. Single-family startups increased by 27%, while multi-family startups decreased by 2% on a 12-month basis.

The largest apartment buildings that broke ground in May were a $ 500 million mixed-use project in Brooklyn, New York, the Mather Senior Living Community in McLean VA worth $ 230 million, and the Alcove Tower in Nashville TN valued at $ 160 million.

At the regional level, launches increased in May in the Midwest, South Atlantic and West regions, but declined in the Northeast and South-Central regions.

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