Housing Starts: Almost No Rebound in July

Bottom Line: After falling sharply in June, housing starts only managed a slight rebound in July, coming in sharply below expectations. While the volatile multifamily sector has been a source of much of the downside misses in the last few months, single family housing starts have lost their upward momentum with only a small rebound in July and the last three months running below the pace of the last six months. Building permits increased by 1.5% and, while volatile, suggest a bit more of a rebound in the coming months. Additionally, starts fell sharply in the West in July -- that looks somewhat anomalous and should correct in August. Still, the overall trend in housing starts is sideways at best. Housing Starts ROSE by 0.9% in July to 1168k, compared with market expectations for an increase to 1260k. Meanwhile, the prior month was revised modestly lower from 1,173k to 1,158k. Housing starts are now 1.4% BELOW their year ago level. Additionally, they are still a sharp 48.6% BELOW their January 2006 peak. Single Family Housing Starts ROSE by 0.9% to 862k. Single family housing starts are 2.7% ABOVE their year ago level but still 52.7% BELOW their January 2006 peak. Multifamily Housing Starts ROSE by 0.7% to 306k. Multifamily starts are now 11.6% BELOW their year ago level.