Housing Starts: Sharp Deceleration to End '18

Bottom Line: The delayed release of December housing starts data showed a sharp decline in activity in the final month of 2018, exacerbating a downtrend that started in the 2nd Quarter as total starts hit a 2-year low. While the often volatile multifamily sector led the declines, single-family starts slumped sharply too, with the 4th Quarter closing at an average annual rate of 811k single-family starts, sharply below the six-month average of 844k and the 12-month average of 868k, confirming a steady downtrend. Overall this report confirms a sharp deceleration in housing in late 2018, as we've seen with other data. More timely mortgage application data gives some indication that 2019 started with stabilization or even improvement, but the existing and new home sales reports in the coming months will be more important than ever as investors look to confirm this. Housing Starts FELL by 11.2% in December to 1078k, compared with market expectations for an increase to 1256k. Housing starts are now 10.9% BELOW their year ago level. However, they are still a sharp 52.6% BELOW their January 2006 peak. Single Family Housing Starts FELL by 6.7% to 758k. Single family housing starts are 10.5% BELOW their year ago level and still 58.4% BELOW their January 2006 peak. Multifamily Housing Starts FELL by 20.4% to 320k. Multifamily starts are now 11.8% BELOW their year ago level.