Housing Starts: Modest Rebound

Bottom Line:  Housing starts rose more than expected in August, led by a sharp jump in multifamily housing, while single-family housing starts fell. On a trend basis, sales were plateauing at a still-robust pace throughout most of the summer. The three- and six-month averages of total starts were nearly the same, still above the 12-month average but below the pace of 2020.  Looking forward, building permits suggested continued growth in the multifamily sector, with mostly steady activity in single-family.  Overall, housing has provided a critical growth driver since the pandemic, but that tailwind is now slowing.Housing Starts ROSE by 3.9% in August to 1615k, compared with market expectations for an increase to 1550k. Meanwhile, the prior month was revised modestly higher from 1,534k to 1,554k.  Housing starts are now 17.4% ABOVE their year-ago level.  However, they are still a sharp 28.9% BELOW their January 2006 peak.

Single-Family Housing Starts FELL by 2.8% to 1076k. Single-family housing starts are 5.2% ABOVE their year-ago level but still 41.0% BELOW their January 2006 peak.

Multifamily Housing Starts ROSE by 20.6% to 539k. Multifamily starts are now 52.7% ABOVE their year-ago level.