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Housing Starts: Sharp Decline As Hurricane Boost Dissipates

January 18, 2018
Bottom Line: Housing starts fell sharply more than expected, led by declines in the single-family sector. Starts of single-family homes were nearly back to September levels after the large hurricane-replacement related boost in October and November. Multi-family starts, typically even more volatile, were actually higher in December versus November and were still almost 10% above September levels. Overall, the last three months of 2017 saw moderately higher starts than in the 3rd Quarter. The trend growth rate looking at yearly averages was modestly slower than in years past.

Housing Starts FELL by 8.2% in December to 1192k, compared with market expectations for a decline to 1275k. Meanwhile, the prior month was revised slightly higher from 1,297k to 1,299k. Housing starts had been slowly climbing, albeit amid substantial volatility, since reaching their cyclical nadir in April 2009 but are now 6.0% BELOW their year ago level. And they are still a sharp 47.6% BELOW their January 2006 peak.

Single Family Housing Starts FELL by 11.8% to 836k. Single family housing starts are 3.5% ABOVE their year ago level but still 54.1% BELOW their January 2006 peak.

Multifamily Housing Starts ROSE by 1.4% to 356k. Multifamily starts are now 22.6% BELOW their year ago level.