111815Housing Starts and PermitsAfter a weaker than expected homebuilder sentiment reading on Tuesday, today’s data on Housing Starts and Building Permits for October came in mixed.  In the case of starts, October’s reading came in at a seasonally adjusted annualized rate of 1.06 mln, which was 100K weaker than expected and the weakest report relative to expectations since April.  While starts were weaker than expected, Building Permits came in slightly ahead of the consensus estimate (1.15 mln vs. 1.147 mln).  The charts to the right show the historical reading of Housing Starts and Building Permits since 2000.  As shown, although both series are now four months removed from their cycle highs, their uptrends remain intact.

The table below breaks down the October starts and permits report by type of unit and on a regional basis.  For starts, declines were across the board in terms of unit size, although the bulk of the decline was in multi-family units (-25.1%) as opposed to single-family units (-2.4%).  From their cycle high of 524K in June, multi-family starts are now down over 35%, while single-family starts are down just 4%.  On a regional basis, both the Northeast and Midwest actually saw m/m increases in October, while the South and West saw declines in the high teens.  For the south, not only were starts down by a double-digit percentage rate m/m, they were also down over 15% from this time last year.  That may be one reason why sentiment among home builders in the south showed the biggest decline in Tuesday’s report.

For permit data, October’s report was significantly more positive as both single-family and multi-family units saw m/m increases.  In fact, for single-family permits, October’s SAAR reading of 711K was a new cycle high.  That bodes well for starts going forward.  On a regional basis, permits data was also healthy with m/m and y/y increases in every region but the West.

111815 Housing Starts Table

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