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Housing Starts: Still Signs of Bottoming

May 17, 2023
Bottom Line:  Housing starts rose as expected in April, but there were modest negative revisions to prior data. Single- and multi-family starts edged higher, but there was a marked shift within multi-family permits -- 5+ unit developments slowed sharply after several quarters of strength, while 2-4 unit projects increased. Overall, we still see signs of bottoming in single-family housing while multi-family remains robust. Even with lower affordability, there's scope for new housing activity to bottom amid a low supply of existing homes. While housing activity remained a drag on economic growth through the 1st Quarter, there's now scope for steady residential investment in the 2nd Quarter and a return to positive growth in the 2nd Half.

Total US Annualized Housing Starts ROSE 30k to 1.4M, BELOW the 3-Month average of 1.4M, ABOVE the 6-Month average of 1.39M and 402k BELOW the year-ago level.
  • Single-Family Starts ROSE 13k to 846k, ABOVE the 3-Month average of 838k, ABOVE the 6-Month average of 838k but 330k BELOW the year-ago level.  
  • Multi-Family Starts ROSE 27k to 542k, BELOW the 3-Month average of 548.33k, ABOVE the 6-Month average of 536.83k, and 72k BELOW the year-ago level.  
  • Total Building Permits FELL 21k to 1.42M, BELOW the 3-Month average of 1.45M, BELOW the 6-Month average of 1.42M, and 379k BELOW the year-ago level.  
  • Single-Family Permits ROSE 26k to 855k, ABOVE the 3-Month average of 826.67k, ABOVE the 6-Month average of 795.17k but 230k BELOW the year-ago level.  
  • Multi-Family Permits: Two-Four Units ROSE 7k to 59k, ABOVE the 3-Month average of 53k, ABOVE the 6-Month average of 52.67k, and 1k ABOVE the year-ago level.  
  • Multi-Family Permits: 5+ Unit FELL 54k to 502k, BELOW the 3-Month average of 565.33k, BELOW the 6-Month average of 568.83k, and 150k BELOW the year-ago level.
Article by Contingent Macro

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