Residential building starts rose by 9% month over month in December 2016, bringing the annual rate up to $306.9 billion, according to Dodge Data & Analytics.
The multifamily sector led residential growth month over month, with a 26% gain in December following a 12% drop in November. Fourteen multifamily projects valued at $100 million or more each broke ground in December, including the $275 million Ancora Apartment Tower in Chicago, a $260 million condo tower in Minneapolis, and a $250 million condo tower in Sunny Isles Beach, Fla.
Single-family housing starts rose by 4% during the same period.
2016’s residential starts reflect a 6% dollar increase from the year prior, to $287.0 billion. Compared with the 16% increase reported in 2015, 2016’s rate of residential-start growth is much more moderate, largely due to the slower increase in multifamily housing across the whole year: Multifamily starts grew by only 3% in 2016, after a 22% gain in 2015.
Much of this slowdown comes from the New York market, where construction starts fell by 28% last year after rising 53% in 2015. Dodge attributes this rise and fall to the expiration of the 421-a tax incentive program in January 2016, as many developers moved the start dates of their projects into 2015 in order to keep their benefits. Without the influence of the New York market, multifamily housing would have risen 13% in dollar value, in line with the corresponding 14% increase in 2015. New York nonetheless remained the top multifamily market by construction starts, followed by Los Angeles and Miami.
Single-family housing starts grew 8% last year in dollar terms, down from a 15% increase in 2015. The Midwest saw the greatest rise in single-family starts last year, at 10%, followed by the South Atlantic, at 9%.
Across residential, commercial, and nonbuilding sectors, new-construction starts rose by 1% last year, to $676.5 billion, a far smaller gain than the 11% increase in 2015.