Housing Starts: Modest Rebound

Bottom Line: Housing starts rebounded more than expected in August -- but the gains were driven by the volatile multifamily sector. Single-family starts rose less than 2% and are still below year-ago levels. Overall, the three month average is now 1211k, still modestly below the 6-month average of 1261k, suggesting a continued modest deceleration in housing activity. Building permits declined by 5.7% and, while volatile, suggest weakness in coming months. Housing Starts ROSE by 9.2% in August to 1282k, compared with market expectations for an increase to 1238k. Meanwhile, the prior month was revised slightly higher from 1,168k to 1,174k. Housing starts are now 9.4% ABOVE their year ago level. However, they are still a sharp 43.6% BELOW their January 2006 peak. Single Family Housing Starts ROSE by 1.9% to 876k. Single family housing starts are 0.2% BELOW their year ago level but still 51.9% BELOW their January 2006 peak. Multifamily Housing Starts ROSE by 29.3% to 406k. Multifamily starts are now 38.1% ABOVE their year ago level.