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Housing Starts:  Pullback in August

September 20, 2016
Bottom Line: Housing starts in August dropped the most in a month since March after solid gains in June and July. The three month average is now 1183k, still modestly above the 6-month average of 1158k. . Single-family home starts saw their largest decline in a month since March while multifamily starts slipped the most since January. Building permits declined by 0.4% and, while volatile, suggest weakness in coming months. Overall, activity in the new home market is still rising modestly but has lost a bit of momentum.

Housing Starts FELL by 5.8% in August to 1142k, compared with market expectations for a decline to 1190k. Meanwhile, the prior month was revised slightly higher from 1,211k to 1,212k. Housing starts have been slowly climbing, albeit amid substantial volatility, since reaching their cyclical nadir in April 2009 and are now 0.9% ABOVE their year ago level. However, they are still a sharp 49.8% BELOW their January 2006 peak.

Single Family Housing Starts FELL by 6.0% to 722k. Single family housing starts are 1.2% BELOW their year ago level. Multifamily Housing Starts FELL by 5.4% to 420k. Multifamily starts are now 4.7% ABOVE their year ago level.

Housing starts in the Northeast saw moderate gains, up 7.6% and are now 12.0% above their 12-month average. The starts in South saw sharp declines, down 14.8% and are still 7.3% below their 12-month average.