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Housing Starts: Sharp Jump, Mostly Due to Volatile Multifamily

February 16, 2018
Bottom Line: Housing starts jumped, led by a 23% increase in multifamily housing, an often volatile sector. Single-family sales rose by 2.7% and, at 877k annualized units, were in-line with their 6-month average pace. Single-family permits fell slightly while multi-family permits rose sharply, suggesting the potential for further gains in the multi-family sector this month. Overall, looking through the volatility, the trend in the housing market is towards modest, steady improvement, particularly in the single-family sector.

Housing Starts ROSE by 9.7% in January to 1326k, compared with market expectations for an increase to 1234k. Meanwhile, the prior month was revised modestly higher from 1,192k to 1,209k. Housing starts have been slowly climbing, albeit amid substantial volatility, since reaching their cyclical nadir in April 2009 and are now 7.3% ABOVE their year ago level. However, they are still a sharp 41.7% BELOW their January 2006 peak.

Single Family Housing Starts ROSE by 3.7% to 877k. Single family housing starts are 7.6% ABOVE their year ago level but still 51.9% BELOW their January 2006 peak.

Multifamily Housing Starts ROSE by 23.4% to 449k. Multifamily starts are now 6.7% ABOVE their year ago level.