Housing Starts: Slower, Trend Still Mixed

Bottom Line: Housing starts were lower and below expectations in June. After a very strong May, the multifamily sector slowed in June while single-family housing starts gained modestly after slowing in May. Overall the trend in housing starts is mixed with most of the recent stabilization led by the multifamily sector. The trend in single-family starts is still down but the pace of declines has slowed. Finally, permits were lower with multifamily falling and single-family gaining slightly, suggesting the rest of the summer season will look much like June. Housing Starts FELL by 0.9% in June to 1253k, compared with market expectations for a decline to 1260k. Meanwhile, the prior month was revised slightly lower from 1,269k to 1,265k. Housing starts are now 6.2% ABOVE their year ago level. However, they are still a sharp 44.9% BELOW their January 2006 peak. Single Family Housing Starts ROSE by 3.5% to 847k. Single family housing starts are 0.8% BELOW their year ago level but still 53.5% BELOW their January 2006 peak. Multifamily Housing Starts FELL by 9.2% to 406k. Multifamily starts are now 24.5% ABOVE their year ago level.