Housing Starts: Steep Decline

Bottom Line:  Housing starts fell slightly more than expected in July, as both single- and multi-family activity slowed. There were slight upward revisions to June data, but not nearly enough to offset the downside surprise in July. Single-family starts continued to trend sharply lower. Multi-family starts fell but remained historically strong, suggesting builders still see demand for affordable housing amid tight supply conditions. Building permits suggest the July trends can continue as permits for larger multi-family projects rose while single-family slipped. Overall, expect single-family construction activity turned from a tailwind to a headwind for economic growth in the 2nd Half of 2022, while strength in multi-family provided a modest offset to some of the weakness.

Total US Annualized Housing Starts FELL 153k to 1.45M, BELOW the 3-Month average of 1.54M, BELOW the 6-Month average of 1.65M and 127k BELOW the year-ago level.

Single-Family Starts FELL 103k to 916k, BELOW the 3-Month average of 1M, BELOW the 6-Month average of 1.1M and 208k BELOW the year-ago level.  Multi-Family Starts FELL 57k to 514k, BELOW the 3-Month average of 514.67k, BELOW the 6-Month average of 534.33k but 76k ABOVE the year-ago level.

Total Building Permits FELL 22k to 1.67M, BELOW the 3-Month average of 1.69M, BELOW the 6-Month average of 1.77M but 19k ABOVE the year-ago level.