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Housing Starts: Sharp Drop in Multifamily

August 16, 2017
Bottom Line: Housing starts fell sharply in July, mostly due to slower construction in the volatile apartment sector. Single-family housing starts fell only modestly. The 3-month average for single-family starts is now close to the 6-month average, still above the 12-month average and well above that of 2016. Overall this suggest that the trend in housing remains modestly positive despite the recent loss in momentum. Building permits declined by 4.1% and, while volatile, suggest momentum may continue to wane in the coming months.

Housing Starts FELL by 4.8% in July to 1155k, compared with market expectations for an increase to 1220k. Meanwhile, the prior month was revised slightly lower from 1,215k to 1,213k. Housing starts had been slowly climbing, albeit amid substantial volatility, since reaching their cyclical nadir in April 2009 However, they are now 5.6% BELOW their year ago level. And they are still a sharp 49.2% BELOW their January 2006 peak.

Single Family Housing Starts FELL by 0.5% to 856k. Single family housing starts are 10.9% ABOVE their year ago level but still 53.0% BELOW their January 2006 peak.

Multifamily Housing Starts FELL by 15.3% to 299k. Multifamily starts are now 33.7% BELOW their year ago level.