Housing Starts: Decline Amid Weakening Trend

Bottom Line: Housing starts fell more than expected in September, led lower by the volatile multi-family sector. On a trend basis both single- and multi-family starts showed slower gains in the late summer with the 3- and 6-month averages below the 12-month average. That said, sales are still running at a pace slightly faster than that of 2017. Building permits declined by 0.6% and, while volatile, suggest weakness in coming months. Single-family permits rose modestly while multi-family permits fell moderately. Housing Starts FELL by 5.3% in September to 1201k, compared with market expectations for a decline to 1210k. Meanwhile, the prior month was revised modestly lower from 1,282k to 1,268k. Housing starts are now 3.7% ABOVE their year ago level. However, they are still a sharp 47.2% BELOW their January 2006 peak. Single Family Housing Starts FELL by 0.9% to 871k. Single family housing starts are 4.8% ABOVE their year ago level but still 52.2% BELOW their January 2006 peak. Multifamily Housing Starts FELL by 15.2% to 330k. Multifamily starts are now 0.9% ABOVE their year ago level.