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Housing Starts: Hurricane-led Rebound As Multifamily Starts Jump

November 17, 2017

Bottom Line: Housing starts jumped to their highest level since 2007, sharply more than expected. The volatile multifamily sector led the gains, rising nearly 37%, while the single-family sector rose just 5% to an annualized pace just above that seen in August. Additionally, the gains were heavily skewed towards the South, where hurricane rebuilding began in October. Overall, the report puts the 3-month average annualized pace for total housing starts just below the 12-month average, indicating hurricane rebuilding may prevent the slowdown that had looked to be developing. But this stronger report doesn't indicate a turn towards renewed strength in the overall trend yet.

Housing Starts ROSE by 13.7% in October to 1290k, compared with market expectations for an increase to 1190k. Meanwhile, the prior month was revised slightly higher from 1,127k to 1,135k.

Housing starts had been slowly climbing, albeit amid substantial volatility, since reaching their cyclical nadir in April 2009 However, they are now 2.9% BELOW their year ago level. And they are still a sharp 43.2% BELOW their January 2006 peak.

Single Family Housing Starts ROSE by 5.3% to 877k. Single family housing starts are 0.7% ABOVE their year ago level but still 51.9% BELOW their January 2006 peak.

Multifamily Housing Starts ROSE by 36.8% to 413k. Multifamily starts are still 9.6% BELOW their year ago level.

Article by Contingent Macro Advisors