Housing Starts: Sharp Rebound Led By The South

Bottom Line: After falling from over 1.5 million annualized units to just 934k from February to April amid shutdowns for the novel coronavirus, housing starts have rebounded sharply, up to nearly 1.5 million in July. Multi-family starts, always volatile, jumped over 50%. Still, the much larger single-family segment was up over 8%, continuing a positive trend over the last three months. Single-family permits were up 17% and multi-family were up 22.5%, suggesting more strength in months to come. After a slower than expected rebound in May and June, sales in the South led the July gains. That said, the South is the only region where three-month average sales are still below the six-month averages, suggesting the trend is still mixed. Overall, this report confirmed that housing will be a key driver of the economic rebound, and most indications suggest that should accelerate modestly in the coming months. Housing Starts ROSE by 22.6% in July to 1496k, compared with market expectations for an increase to 1245k. Meanwhile, the prior month was revised modestly higher from 1,186k to 1,220k. Housing starts are now 23.4% ABOVE their year-ago level. However, they are still a sharp 34.2% BELOW their January 2006 peak. Single Family Housing Starts ROSE by 8.2% to 940k. Single-family housing starts are 7.4% ABOVE their year-ago level but still 48.4% BELOW their January 2006 peak. Multifamily Housing Starts ROSE by 58.4% to 556k. Multifamily starts are now 65.0% ABOVE their year-ago level.