Housing Starts: Single-Family Slower, Multi-family Still Strong

Bottom Line:  Housing starts fell slightly more than expected in June, but there were positive revisions to May data. Single-family starts declined sharply and were trending towards levels seen before the pandemic and after the tax changes in 2018. Multi-family starts, though, remained historically strong, moving a touch higher on the month and still in an uptrend, driven by larger projects of five or more units. While multi-family is always volatile and can turn quickly, these data suggest that the supply of affordable housing remains tight, and developers expect to meet the demand for affordable housing with multi-family units. Building permits suggest the June trends can continue as permits for larger multi-family projects rose while single-family slipped. Overall, expect single-family construction activity to turn from a tailwind to a headwind for economic growth in the 2nd Half of 2022, while strength in multi-family provides a modest offset to some of the weakness.

Total US Annualized Housing Starts FELL 32k to 1.56M, BELOW the 3-Month average of 1.65M, BELOW the 6-Month average of 1.69M and 105k BELOW the year-ago level.
 
Single-Family Housing Starts FELL 86k to 982k, BELOW the 3-Month average of 1.07M, BELOW the 6-Month average of 1.13M and 183k BELOW the year-ago level.

Multi-Family Housing Starts ROSE 74k to 568k, ABOVE the 3-Month average of 560.33k, ABOVE the 6-Month average of 537.17k and 80k ABOVE the year-ago level.

Total Building Permits FELL 10k to 1.69M, BELOW the 3-Month average of 1.73M, BELOW the 6-Month average of 1.8M but 24k ABOVE the year-ago level.

Single-Family Permits FELL 84k to 967k, BELOW the 3-Month average of 1.04M, BELOW the 6-Month average of 1.12M and 124k BELOW the year-ago level.

Multi-Family Permits: Two-Four Unit FELL 3k to 52k, BELOW the 3-Month average of 54.33k, BELOW the 6-Month average of 55k but 3k ABOVE the year-ago level.

Multi-Family Permits: 5+ Unit ROSE 77k to 666k, ABOVE the 3-Month average of 637.67k, ABOVE the 6-Month average of 626.5k and 145k ABOVE the year-ago level.