Housing Starts: Strong Uptrend Developed for Single-Family

Bottom Line: Housing starts rose less than expected in September, and August starts were revised modestly lower. But the miss and revisions were mostly driven by the volatile multi-family sector. Single-family housing starts were stronger for the fifth straight month and are now firmly in an uptrend again after 18 months of stagnation starting in the 2nd half of 2018. For now, the trend in multi-family starts remains mixed. But the shift away from more dense urban housing towards single-family since the pandemic should continue to make new single-family projects much more attractive to builders than new multi-family projects. The permit data in September confirmed this. Overall, the housing trend is strong and should provide a source of strength in economic recovery. Housing Starts ROSE by 1.9% in September to 1415k, compared with market expectations for an increase to 1465k. Meanwhile, the prior month was revised modestly lower from 1,416k to 1,388k. Housing starts are now 11.1% ABOVE their year-ago level. However, they are still a sharp 37.7% BELOW their January 2006 peak. Single Family Housing Starts ROSE by 8.5% to 1108k. Single-family housing starts are 22.3% ABOVE their year ago level but still 39.2% BELOW their January 2006 peak. Multifamily Housing Starts FELL by 16.1% to 307k. Multifamily starts are now 16.6% BELOW their year-ago level.