Housing Starts: Strong Gains

Bottom Line: Housing starts rebounded sharply in October, led by single-family homes, which hit the highest pace of new starts since early 2007. This was the sixth month of gains for single-family starts, 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 also confirmed this. Overall, the housing trend is strong and should provide a source of strength in economic recovery. Housing Starts ROSE by 4.9% in October to 1530k, compared with market expectations for an increase to 1460k. Meanwhile, the prior month was revised moderately higher from 1,415k to 1,459k. Housing starts are now 14.2% ABOVE their year-ago level. However, they are still a sharp 32.7% BELOW their January 2006 peak. Single-Family Housing Starts ROSE by 6.4% to 1179k. Single-family housing starts are 29.4% ABOVE their year-ago level but still 35.3% BELOW their January 2006 peak. Multifamily Housing Starts FELL by 0.0% to 351k. Multifamily starts are now 18.2% BELOW their year-ago level.