Housing Starts: Recovery In Jeopardy

Bottom Line:  Housing starts rose moderately in July but were only higher after negative revisions to June data. Starts were still trending modestly higher through July, but the upward trend was losing some momentum amid another push higher in mortgage rates. Since these data were collected, rates have moved even higher. Looking forward, building permits were nearly unchanged, as declines in multi-family permits fell almost as much as the single-family rose. Overall, housing starts had been looking like they would make a quick swing from bottoming to a full rebound. But that notion is in jeopardy now. While there is structural, demographic-led demand for housing, developers appear worried that potential buyers will be hampered by higher mortgage rates.

Total US Annualized Housing Starts ROSE 54k to 1.45M, BELOW the 3-Month average of 1.48M, ABOVE the 6-Month average of 1.43M but 81k ABOVE the year-ago level. Single-Family Starts ROSE 62k to 983k, ABOVE the 3-Month average of 972k, ABOVE the 6-Month average of 906.83k and 85k ABOVE the year-ago level.

Multi-Family Starts were unchanged at 460k, BELOW the 3-Month average of 494.33k, BELOW the 6-Month average of 512.5k, nearly in-line with year-ago level.

Total Building Permits were nearly unchanged, UP 1k to 1.44M, BELOW the 3-Month average of 1.46M, BELOW the 6-Month average of 1.45M, and 216k BELOW the year-ago level.