Housing Starts and Building Permits for the month of July were released earlier and showed mixed results relative to expectations. As shown to the right, Housing Starts came in at a level of 1.211 million SAAR units versus expectations for 1.18 million. Building Permits, however, were slightly weaker at a rate of 1.152 million versus estimates of 1.160 million units. As shown in the charts below, Starts are just 2K off their cycle high of 1.213 million units in June of 2015 and February of this year, while Permits are still trying to recover (unsuccessfully) from last summer’s tax-incentivised peak.
The table below breaks down this month’s report by region and type of unit. For both Starts and Permits, strength this month was in multi-family units which grew 5.0% and 6.3%, respectively. On a year/year basis, however, multi-family units are down big time, while single-family units are positive. Again, these big declines in multi-family units on a year/year basis are mostly the result of tax breaks for multi-family units in New York State that expired last summer. It is really clear in the y/y regional breakdown of both Starts and Permits — while every other region is up or down modestly, Starts in the Northeast are down 40.2% y/y and Permits are down 65.1%!
Finally, to smooth out the month to month moves in Starts and Permits, the chart below shows the rolling twelve-month average of the two series. It may be hard to see in the chart, but for the first time since March, both twelve-month averages increased on a month/month basis, and for Starts at least, barring a big drop in the months ahead, should keep trending higher.