Multifamily Starts Indicate a Gradual Recovery
Following the previous month's anomalous reading (caused by an impending building code change in New York City), the Census Bureau's (seasonally adjusted annual) starts rate for buildings with five or more units in July came in at 309,000. Although down 23.5% from June, this is still a relatively healthy number that's up 12% from the rate posted in July of 2007.

The New York situation also impacted the rate at which new five-plus permits were issued, which declined from 489,000 in June to a more typical 318,000 in July. Looking ahead, a five-plus starts rate above 300,000 is higher than any of the numbers appearing in NAHB's short-term forecast, which has now been extended through 2010.

The new forecast shows multifamily production weakening through the end of 2009, before gradually rebounding in 2010. The forecast calls for a five-plus starts rate of 275,000 in the third quarter of 2008, declining in a series of steps to a low of 215,000 throughout the second half of 2009, then finally regaining some lost ground, rising back up to 250,000 by the end of 2010.

In total, NAHB's forecast projects that there will be 287,000 five-plus starts in 2008 (up 4.3%from the number posted in 2007), 218,000 in 2009 (down 24.3% from the forecast for 2008), and 237,000 in 2010 (up 8.9 percent from the forecast for 2009).

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