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Housing Starts: Resilient To Rate Rise

March 17, 2022
Bottom Line:  Housing Starts rebounded in February, hitting a new cycle high, as activity proved resilient to higher mortgage rates. The activity was seasonally strong in all but the West, suggesting seasonal factors were somewhat of a factor in the strength. Still, the report showed solid activity across single- and mult-family starts. Building permits were a touch lower, but still at historically robust levels. Overall, homebuilders remain active in a market with tight supply and solid demand, even amid lower affordability due to higher mortgage rates.
Housing Starts ROSE by 6.8% in February to 1769k, compared with market expectations for an increase to 1700k.  Meanwhile, the prior month was revised modestly higher from 1,638k to 1,657k.  Housing starts are now 22.3% ABOVE their year-ago level.  However, they are still a sharp 22.2% BELOW their January 2006 peak.

Single-Family Housing Starts
ROSE by 5.7% to 1215k. Single-family housing starts are 13.7% ABOVE their year-ago level but still 33.4% BELOW their January 2006 peak.

Multifamily Housing Starts
ROSE by 9.3% to 554k. Multifamily starts are now 46.6% ABOVE their year-ago level.
Article by Contingent Macro Advisors