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Housing Starts: Solid Rebound

July 19, 2017
Bottom Line: Housing starts rose sharply after slow gains in April and May. The three month average is now 1164k, still modestly below the 6-month average of 1201k. Multifamily starts rose, leading the gains, particularly in the Northeast, suggesting some of the surprise strength in June may prove anomalous. Single-family home starts increased moderately. Building permits increased by 7.4% and, while volatile, suggest strength in coming months. Overall, demand for housing continues to outpace supply as builders report higher costs and less available land in key population centers. This is making for only modest growth in new residential construction but steadily higher prices for existing homes.

Housing Starts ROSE by 8.3% in June to 1215k, compared with market expectations for an increase to 1160k. Meanwhile, the prior month was revised modestly higher from 1,092k to 1,122k.

Housing starts had been slowly climbing, albeit amid substantial volatility, since reaching their cyclical nadir in April 2009 However, they are now 2.1% ABOVE their year ago level. And they are still a sharp 46.5% BELOW their January 2006 peak.

Single Family Housing Starts ROSE by 6.3% to 849k. Single family housing starts are 10.3% ABOVE their year ago level but still 53.4% BELOW their January 2006 peak.

Multifamily Housing Starts ROSE by 13.3% to 366k. Multifamily starts are now 12.9% BELOW their year ago level.