Housing Starts: Sharp Rebound in MultiFamily Boosts August Data

Bottom Line: Housing starts were sharply higher than expected in August, led by gains in the volatile multifamily sector. Multifamily sales rose nearly 33% to 445k units, the highest level since May. Single-family starts, typically much less volatile, rose over 4%, hitting their highest level on a seasonally adjusted basis since January. Overall, the trend is still mixed but is showing signs of improving modestly after being flat to down since late last year. Finally, building permits increased by 7.7% and, while volatile, suggest strength in coming months. Single-family permits rose modestly while multi-family permits rose moderately. Housing Starts ROSE by 12.3% in August to 1364k, compared with market expectations for an increase to 1250k. Meanwhile, the prior month was revised modestly higher from 1,191k to 1,215k. Housing starts are now 6.6% ABOVE their year ago level. However, they are still a sharp 40.0% BELOW their January 2006 peak. Single Family Housing Starts ROSE by 4.4% to 919k. Single family housing starts are 3.4% ABOVE their year ago level but still 49.6% BELOW their January 2006 peak. Multifamily Housing Starts ROSE by 32.8% to 445k. Multifamily starts are now 14.1% ABOVE their year ago level.