Housing Starts: Continued Declines

Bottom Line:  Housing starts fell slightly less than expected in December, but November data was revised lower. Single-family starts rose to a four-month high, while multi-family, which had remained surprisingly robust, fell sharply. However, some of the gains in single-family sales appear due to better weather in the early part of December, especially in the Northeast, rather than any major shift in the trend. Moreover, building permits suggested further weakness in both segments, with single-family permits falling particularly sharply. Overall, single-family construction activity turned from a tailwind to a sharp headwind for economic growth in the 2nd Half of 2022. While strength in multi-family provided a modest offset to some of the initial weakness, all signs suggested housing was a considerable drag on in the 4th Quarter and likely to remain so at least into the early part of 2023.

Total US Annualized Housing Starts FELL 19k to 1.38M, BELOW the 3-Month average of 1.4M, BELOW the 6-Month average of 1.43M and 386k BELOW the year-ago level.