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Housing Starts: Sharp Decline, Not All Accounted For By Hurricanes

October 18, 2017

Bottom Line: Housing starts slipped nearly 5% in September. While the regional data suggested an impact from the hurricanes in the South, there were declines in both the Northeast and the Midwest. Overall, housing activity was losing momentum even before the weather disruption. The three month average for starts is now 1165k, just slightly below the 6-month average of 1166k. A slowdown in multifamily housing starts has led the overall slowdown. And building permits, while volatile, suggest weakness in coming months as permits in multifamily slipped over 16% in September.

Housing Starts FELL by 4.7% in September to 1127k, compared with market expectations for a decline to 1175k. Meanwhile, the prior month was revised slightly higher from 1,180k to 1,183k.

Housing starts had been climbing, albeit amid substantial volatility, since reaching their cyclical nadir in April 2009. However, they are now only 6.1% ABOVE their year ago level. And they are still a sharp 50.4% BELOW their January 2006 peak.

Single Family Housing Starts FELL by 4.6% to 829k. Single family housing starts are 5.9% ABOVE their year ago level but still 54.5% BELOW their January 2006 peak.

Multifamily Housing Starts FELL by 5.1% to 298k. Multifamily starts are now 6.8% ABOVE their year ago level.

Article by Contingent Macro Advisors