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2024 Multifamily Construction: Units Completed Reaches 38-year High

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Multifamily units completed in 2024 recorded their highest level since 1986 at 608,000 units, according to NAHB analysis of the Census Bureau’s Survey of Construction. For the eighth consecutive year, most multifamily units were in buildings with 50 or more units (these will be labeled as high-density buildings).

As shown below, this trend is relatively new. Dating back to the earliest estimates in the series (1972), most multifamily units were historically located in buildings with less than 50 units (low-medium density buildings). Of the total 608,000 multifamily units completed in 2024, 330,000 (54%) were in high-density buildings while the remaining 278,000 (46%) were in low-medium density buildings.

Regional Distribution

The South continued to be the leading region in terms of units completed, rising from 212,000 in 2023 to 292,000 completions in 2024. The South accounted for 48% of the total number of completions; the West held 27% (163,000), the Midwest 14% (87,000), and the Northeast 11% (68,000). Singularly, the South was the only region where the number of units completed in low-medium density buildings outpaced the number in high-density buildings. The South had 147,000 completions in low-medium density compared to 145,000 units in high-density.

Conversely, in the Midwest and Northeast the number of units in high-density buildings nearly doubled those of low-medium density buildings. For the Midwest, there were 58,000 units in high-density buildings and 29,000 low-medium density units. The Northeast had 45,000 units in high-density buildings and 23,000 low-medium density units. The West featured an almost 50/50 split with 82,000 high-density units and 81,000 low-medium density.

Built-for-Rent

Among multifamily units completed in 2024, 95% were built-for-rent at a level of 580,000. Over half of these units (55%) were in a building with 50 units or more. This is a seismic shift towards high-density buildings, as this share was only 25% in 2004. Over the past twenty years, there has consistently been a falling share of units in buildings with 10-19 units, as the share in 2004 was 24%, while in 2024 this share only accounts for 4% of completed units.

Built-for-Sale

The number of multifamily units built-for-sale rose from 20,000 in 2023 to 29,000 in 2024. High-density buildings continued to be the primary type of building where these units were built, with 40% of built-for-sale units being completed in buildings with 50+ units. This share was up from 28% in 2023. The largest loss in market share for multifamily built-for-sale units was for buildings with 10-19 units, dropping from 23% in 2023 to just 13% in 2024.

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May Private Residential Construction Spending Dips

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Private residential construction spending fell by 0.5% in May, marking the fifth straight month of decreases. This drop was primarily driven by reduced spending on single-family construction. Compared to a year ago, total spending was down 6.7%, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates.

According to the latest U.S. Census Construction Spending data, single-family construction spending declined by 1.8% in May. This decrease aligns with the third lowest reading of NAHB/Wells Fargo Housing Market Index (HMI) since 2012. Compared to a year ago, single-family construction spending decreased by 4.5%. Meanwhile, multifamily construction spending stayed flat for the month but continued to follow the downward trend that began in mid-2023. Compared to May 2024, multifamily spending was down 10.9%. Improvement spending (remodeling) was up 0.9% in May but was 7.8% lower on a year-over-year basis.

The NAHB construction spending index is shown in the graph below. The index illustrates how   spending on single-family construction has slowed since early 2024 under the pressure of elevated interest rates and concerns over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023. Improvement spending has also been weakening since the beginning of 2025.

Spending on private nonresidential construction was down 3.9% over a year ago. The annual private nonresidential spending decrease was primarily driven by a $15 billion drop in commercial construction spending, followed by a $9.0 billion decrease in the manufacturing category.

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Flat Job Openings for Construction

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The count of open, unfilled positions in the construction industry held steady amid a slowdown for housing, per the May Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).

The number of open jobs for the overall economy increased slightly from 7.40 million in April to 7.77 million in May. This is smaller than the 7.90 million estimate reported a year ago and reflects a softened aggregate labor market. However, the May estimate was a stronger number than expected and runs counter to some other, recent negative reporting of labor market data.

Previous NAHB analysis indicated that this number had to fall below 8 million on a sustained basis for the Federal Reserve to move forward on interest rate reductions. With estimates remaining below 8 million for national job openings, the Fed, in theory, should be able to cut further despite a recent pause. There is growing pressure on the Fed to do so.

The number of open construction sector jobs was effectively unchanged from a revised 242,000 in April to 245,000 in May. This nonetheless marks a significant reduction of open, unfilled construction jobs than that registered a year ago (375,000) due to a slowing of construction/housing activity. The chart below notes the recent decline for the construction job openings rate, which is now near the lows of 2019.

The construction job openings rate was steady at 2.8% in May, although significantly lower year-over-year from 4.4%.

The layoff rate in construction held at 2% in May. The quits rate increased on a monthly basis to 2.3%, the same as a year ago.

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Single-family Construction Loan Volume Grows

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Credit conditions for builders and developers eased in the first quarter of 2025 as the level of outstanding 1-4 family residential construction loans rose for the first time in two years, according to data released by FDIC. While the volume of 1-4 family residential construction loans rose, a drop in other real estate development loans offset the increase, resulting in the fifth straight quarterly decline in the total volume of outstanding acquisition, development, and construction loans.

In the first quarter of 2025, the total level of outstanding acquisition, development, and construction loans fell to $478.3 billion, down 4.1% from a year ago. This was driven by the drop in other real estate development loans, which fell to $388.2 billion, down 3.8% compared to the a year ago. The volume of 1-4 family residential construction and land development loans totaled $90.0 billion in the first quarter, down 5.2% from a year ago. On a quarterly basis, this volume is up 0.6% from $89.5 billion one quarter ago.

It is worth noting, the FDIC data represent only the stock of loans, not changes in the underlying flows, so it is an imperfect data source. Nonetheless, lending remains much reduced from years past. The current amount of existing 1-4 family residential AD&C loans now stands 56% lower than the peak level of residential construction lending of $204 billion reached during the first quarter of 2008. Alternative sources of financing, including equity partners, have supplemented this capital market in recent years.

Quality Metrics of Construction Loans

Along with the volume increase of 1-4 family residential construction loans, the share of the volume that is 30+ days past due or nonaccrual status grew in the first quarter. The total level of past due and nonaccrual loans was $1.2 billion, up 24.4% from $978.4 million a year ago. As a share of the total 1-4 family residential construction loan volume, this accounts for only 1.4% but is notably the highest share since 2015.

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Producer Prices Rise in May: New Construction Input Analysis

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Prices for inputs to new residential construction—excluding capital investment, labor, and imports—rose 0.2% in May, following a (revised) decrease of 0.2% in April. These figures are taken from the most recent Producer Price Index (PPI) report published by U.S. Bureau of Labor Statistics. The PPI measures prices that domestic producers receive for their goods and services; this differs from the Consumer Price Index which measures what consumers pay and includes both domestic products as well as imports.

The inputs to the New Residential Construction Price Index grew 1.9% from May of last year. The index can be broken into two components­—the goods component increased 1.6% over the year, with services increasing 2.3%. For comparison, the total final demand index, which measures all goods and services across the economy, increased 2.6% over the year, with final demand with respect to goods up 1.3% and final demand for services up 3.2% over the year.

Input Goods

The goods component has a larger importance to the total residential construction inputs price index, representing around 60%. For the month, the price of input goods to new residential construction was up 0.1% in May.

The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring remaining goods. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index.

Energy input prices were up 0.8% between April and May but were 9.8% lower than one year ago. Building material prices were up 0.1% between April and May while up 2.5% compared to one year ago. Across building material inputs, the commodity with the largest monthly increase in May was parts for construction machinery and equipment, which increased 6.8% after increasing 8.4% in April.

Input Services

Prices for service inputs to residential construction reported an increase of 0.3% in May. On a year-over-year basis, service input prices are up 2.3%. The price index for service inputs to residential construction can be broken out into three separate components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation and warehousing component (other services). The most significant component is trade services (around 60%), followed by other services (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was up 2.9% from a year ago. The other services component was up 1.4% over the year.  Lastly, prices for transportation and warehousing services advanced 1.8% compared to May of last year.

Inputs to New Construction Satellite Data

Within the PPI that BLS publishes, new experimental data was recently published regarding inputs to new construction. The data expands existing inputs to industry indexes by incorporating import prices with prices for domestically produced goods and services. With this additional data, users can track how industry input costs are changing among domestically produced products and imported products. This data focuses on new construction, but the complete dataset includes indices across numerous industries, found here.

New Construction input prices are primarily influenced by domestically produced goods and services, with domestic products accounting for 90% of the weight of the industry index for new construction. Imported goods make up the remaining 10% of the index. The latest available data, for March 2025, showed that domestically produced goods have experienced faster price growth compared to imported goods used in new construction. On a year-over-year basis, the index for domestic goods increased 0.8%, while prices for imported inputs fell 2.1% over the same period. Across all inputs to new construction, services prices have risen more than good inputs over the past year, as domestic services prices rose 2.2%. Across the three indexes, all inputs remain at higher levels compared to pre-pandemic prices.

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States with Highest and Fastest Rising Construction Wages, 2025

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Wage growth in construction continued to decelerate in April on a national basis, but the differences across regional markets remain stark. Nationally, average hourly earnings (AHE) in construction increased 3.6% year-over-year and crossed the $39.3 mark when averaged across all payroll employees (non-seasonally adjusted, NSA). Meanwhile, average earnings in construction in Alaska and Massachusetts exceeded $50 per hour (NSA). Across states, the annual growth rate in AHE ranged from 10.6% in Nevada to a decline of 3% in Oklahoma. This is according to the latest Current Employment Statistics (CES) report from the Bureau of Labor Statistics (BLS).   

Average hourly earnings (AHE) in construction vary greatly across 43 states that report these data. Alaska, states along the Pacific coast, Illinois, Minnesota, and the majority of states in Northeast record the highest AHE. As of April 2025, fourteen states report average earnings (NSA) exceeding $40 per hour.

At the other end of the spectrum, nine states report NSA average hourly earnings in construction under $34. The states with the lowest AHE are mostly in the South, with Arkansas reporting the lowest rate of $29.3 per hour.

While differences in regional hourly rates reflect variation in the cost of living across states among other things, the faster growing wages are more likely to indicate specific labor markets that are particularly tight. Year-over-year, Nevada, Mississippi, Alaska, Colorado, Texas, Florida, South Carolina, and Montana reported fastest growing hourly wages in construction, more than doubling the national average growth of 3.6%. Nevada reported the largest annual increase of 10.6%, while the growth rate in Mississippi and Alaska was just under 10%.

In sharp contrast, Oklahoma registered a decline in hourly wages of 3%. Five other states reported modestly declining hourly rates in construction, compared to a year ago – Louisiana, Missouri, Rhode Island, California, and Wisconsin.

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Construction Job Openings Steady in April

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The count of open, unfilled positions in the construction industry held steady amid a slowdown for housing, per the April Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).

The number of open jobs for the overall economy increased slightly from 7.20 million in March to 7.39 million in April. This is notably smaller than the 7.62 million estimate reported a year ago and reflects a softened aggregate labor market. Previous NAHB analysis indicated that this number had to fall below 8 million on a sustained basis for the Federal Reserve to move forward on interest rate reductions. With estimates remaining below 8 million for national job openings, the Fed, in theory, should be able to cut further despite a recent pause. However, tariff proposals may keep the Fed on pause in the coming quarters.

The number of open construction sector jobs was effectively unchanged from a revised 251,000 in March to 248,000 in April. This nonetheless marks a significant reduction of open, unfilled construction jobs than that registered a year ago (326,000) due to a slowing of construction activity. The chart below notes the recent decline for the construction job openings rate, which is now back to the lows of 2019.

The construction job openings rate was unchanged at 2.9% in April, although significantly lower year-over-year from 3.8%.

The layoff rate in construction ticked higher to 1.9% in April. The quits rate dipped to 1.8% for the month.

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April Private Residential Construction Spending Dips

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Private residential construction spending fell by 0.9% in April, marking the third consecutive monthly decline. This decrease was primarily driven by reduced spending in single-family construction and home improvements. Compared to a year ago, total spending was down 4.8%, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates.

According to the latest U.S. Census Construction Spending data, single-family construction spending declined by 1.1% in April. This decrease aligns with the weakness in the April single-family starts and NAHB/Wells Fargo Housing Market Index (HMI). The April data ends seven months of growth in single-family construction spending, making it 2.2% lower than a year ago. Meanwhile improvement spending was down 0.8% in April and was 5.5% lower on a year-over-year basis. Multifamily construction spending edged down 0.1% in April, staying in the downward trend that began in December 2023. Compared to April 2024, multifamily spending was down 11.3%.

The NAHB construction spending index is shown in the graph below. The index illustrates how   spending on single-family construction has slowed since early 2024 under the pressure of elevated interest rates and concerns over building material tariffs. Multifamily construction spending growth has also slowed down after the peak in July 2023. Improvement spending has also been weakening since the beginning of 2025.

Spending on private nonresidential construction was up 1% over a year ago. The annual private nonresidential spending increase was mainly due to higher spending for the class of power ($7.9 billion), followed by the office category ($3.3 billion).

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Slight Gains for Townhouse Construction

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Townhouse construction expanded more than 2 percent on a year-over-year basis per data from the first quarter of 2025.

According to NAHB analysis of the most recent Census data of Starts and Completions by Purpose and Design, during the first quarter of 2025, single-family attached starts totaled 43,000. Over the last four quarters, townhouse construction starts totaled a strong 175,000 homes, which is 2% higher than the prior four-quarter period (171,000). Townhouses made up 19% of single-family housing starts for the first quarter of the year, near a data series high.

Using a one-year moving average, the market share of newly-built townhouses stood at 17.6% of all single-family starts for the first quarter. With recent gains, the four-quarter moving average market share is the highest on record, for data going back to 1985.

Prior to the current cycle, the peak market share of the last two decades for townhouse construction was set during the first quarter of 2008, when the percentage reached 14.6% on a one-year moving average basis. This high point was set after a fairly consistent increase in the share beginning in the early 1990s.

The long-run prospects for townhouse construction are positive given growing numbers of homebuyers looking for medium-density residential neighborhoods, such as urban villages that offer walkable environments and other amenities. Where it can be zoned, it can be built.

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Highest Paid Occupations in Construction in 2024

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Half of payroll workers in construction earn more than $60,320 and the top 25% make at least $81,510, according to the latest May 2024 Bureau of Labor Statistics Occupational Employment and Wage Statistics (OEWS) and analysis by the National Association of Home Builders (NAHB). In comparison, the U.S. median annual pay is $49,500, while the top quartile (the highest paid 25%) makes at least $78,810.

The OEWS publishes wages for almost 400 occupations in construction. Out of these, only 46 are construction trades. The other construction industry workers are in finance, sales, administration and other off-site activities.

In 2024, the highest paid occupation in construction is lawyers with wages of $180,520 per year, and the top 25 percent making over $238,720. Traditionally, Chief Executive Officer (CEO) occupy the top paid position in the industry, but in 2024, they are second on the list, with half of CEOs making over $174,030, while the wages of the top quartile remain undisclosed.

Out of the top twenty highest paid occupations in construction, fourteen are various managers. The highest paid managers in construction are architectural and engineering managers, with half of them making over $153,510 and the top 25 percent on the pay scale earning over $181,150 annually.

The architectural and engineering managers also stand out for having a smaller salary range spread, measured as a percentage difference between the bottom and top 25 percent pay levels. Only computer and information systems (CIS) managers have a narrower pay range among managers in construction. The annual pay of the highest paid 25 percent CIS managers in construction is at least $168,850, which is 40% higher than the top earnings of the lowest paid quartile ($119,990). In contrast, higher-level positions, such as lawyers and CEOs, have a noticeably wider pay scale spread. The top 25 percent highest paid lawyers make more than double of the bottom quartile pay, potentially reflecting a greater range of responsibilities and opportunities for career advancement for lawyers in construction.

Among construction trades, elevator installers and repairers top the median wages list with half of them earning over $108,130 a year, and the top 25% making at least $133,370. This is also the only construction trade that made the industry overall top 20 highest paid occupations list. 

First-line supervisors of construction trades are next on the trade list; their median wages are $78,900, with the top 25% highest paid supervisors earning more than $100,150.  

In general, construction trades that require more years of formal education tend to offer higher annual wages. Median wages of construction and building inspectors are $66,340 and the top quartile is $89,550. This is also the trade with a relatively wide pay scale spread, with the top 25 percent making at least 74% more than the bottom quartile, potentially reflecting a wider variance in educational attainment, professional responsibilities and expertise of building inspectors.

Carpenters are one of the most prevalent construction crafts in the industry. The trade requires less formal education. Nevertheless, the median wages of carpenters working in construction exceed the national median. Half of these craftsmen earn over $59,890 and the highest paid 25 percent bring in at least $76,290.

Plumbers and electricians, trades that typically require specialized training and licensing, earn higher annual wages. Half of plumbers in construction earn over $62,820, with the top quartile making over $81,740. Electricians’ wages are similarly high.

The construction trade with the greatest pay range spread is pile driver operators. The top 25 percent highest paid operators earn at least $105,100, over 100% more than the bottom quartile. This wide pay scale presumably reflects a greater variety of opportunities and geographic locations (some pile driver operators work on offshore rigs), as well as varying degree of technical expertise and training (some equipment comes with computerized controls and requires additional knowledge of electronics).

In contrast, solar photovoltaic installers, a relatively new construction trade, have a much narrower pay scale. The difference between the annual pay of the top 25 percent ($65,850) and the bottom quartile ($48,350) is 36%, likely reflecting less variation in expertise, training, and geographic prevalence.

Typically, construction trades that require less skill not only offer lower wages but also show less variation in pay. Apprentice workers (helpers of painters, plumbers, electricians, roofers, carpenters, and other construction trades) illustrate this point. These are the six lowest paid construction occupations that simultaneously show the narrowest variation in pay. For example, the highest paid quartile of carpenters’ helpers makes at least $46,720 a year, while the bottom quartile earns at most $35,870, only a 30% difference.

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