Despite a possible negative impact from Hurricane Harvey, both Housing Starts and Building Permits for the month of August came in better than expected. As shown above, the beat in Building Permits was especially impressive as there hasn’t been a bigger ‘beat’ versus expectations since November 2015! Furthermore, this month’s better than expected report comes on the heels of July’s reports which also exceeded expectations. How often do both Housing Starts and Building Permits exceed expectations for two straight months? Not often. At least not in recent history; the last occurrence was nearly five years ago in October 2012.
The table below breaks down this month’s report by region and size of unit. While overall housing starts were down this month, all of the weakness was in multi-family units which were down 6.5% m/m and by nearly a quarter y/y. Single-family units, on the other hand, rose 1.6% m/m and are up over 17% versus this point last year. As a result of these moves, even though overall Housing Starts are down by nearly 150K from their peak last October, single-family starts are just 26K off their peak. For Building Permits, it is a similar story as single-family starts are within 30K of their cycle peak, while multi-family units are down by over 160K.
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