Housing Starts: Smaller Than Expected Rebound As The South Slows

June 17, 2020
Bottom Line: After falling from over 1.5 million annualized units to just 934k units from February to April amid shutdowns for the novel coronavirus, housing starts rebounded only slightly in May, much less than expected. Single-family starts were nearly flat, while multifamily rebounded. Starts in the West, where shutdowns were generally more stringent, rebounded sharply, while starts in the South, where the extent of the shutdowns was more mixed, surprisingly fell again in May. Starts in the South, the largest region in the survey, were down to 479k annualized units in May from 869k in February. These data suggest reopenings and resumption of activity, will remain volatile and mixed across the country. Uncertainty about reopenings and the possibility of new closures left builders with enough ambiguity to prevent them from starting new projects. That said, building permits increased by 14.4% and, while volatile, suggests strength in the coming months. Single-family permits rose moderately while multi-family permits rose sharply. Housing Starts ROSE by 4.3% in May to 974k, compared with market expectations for an increase to 1100k. Meanwhile, the prior month was revised moderately higher from 891k to 934k. Housing starts are now 23.2% BELOW their year-ago level. However, they are still a sharp 57.1% BELOW their January 2006 peak. Single-Family Housing Starts ROSE by 0.1% to 675k. Single-family housing starts are 17.8% BELOW their year-ago level but still 63.0% BELOW their January 2006 peak. Multifamily Housing Starts ROSE by 16.8% to 299k. Multifamily starts are now 33.1% BELOW their year-ago level.