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Housing Starts: Slower 3rd Quarter

October 19, 2021
Bottom Line:  Housing starts fell in the final month of the 3rd Quarter, coming in below expectations in September with negative revisions to August data. Most of the volatility in recent months has come from the multifamily sector, but the trend in single-family starts is showing concerning signs on a trend basis. Single-family starts in the 3rd quarter were modestly below the 2nd Quarter pace and well below the 12-month average.  Amid modestly higher mortgage rates, builders appeared concerned about the outlook, pulling fewer permits for both single-family and multifamily projects. Overall, housing provided a critical growth driver since the pandemic, but that tailwind slowed throughout the 3rd Quarter.
Housing Starts FELL by 1.6% in September to 1555k, compared with market expectations for no change to 1615k. Meanwhile, the prior month was revised modestly lower from 1,615k to 1,580k.  Housing starts are now 7.4% ABOVE their year-ago level.  However, they are still a sharp 31.6% BELOW their January 2006 peak.
Single-Family Housing Starts
FELL by 0.0% to 1080k. Single family housing starts are 2.3% BELOW their year-ago level but still 40.8% BELOW their January 2006 peak.
Multifamily Housing Starts FELL by 5.8% to 475k. Multifamily starts are now 38.5% ABOVE their year-ago level.