July housing starts totaled 1.155mm, 65k less than expected and down from 1.213mm in June. Most of the reason for the m/o/m drop was a 54k unit fall in multi family as single family starts were down just 4k m/o/m. As for permits, single family was unchanged m/o/m at 811k while multi family permits fell by 52k after jumping by 75k in June.
I’ll use pictures to bottom line single family starts. On one hand the chart reflects the aftermath of a massive bubble but on the other hand reflects a lot of catch up to come. At this stage of the cycle, I believe much of the catch up from here will be dependent on prices and affordability and whether first time households decide to pay up or rent instead. According to survey’s seen, signs are there that they are beginning to question paying up.
SINGLE FAMILY STARTS
The multi family business has been very good for reasons we all know (homeownership rate at near 50 yr lows) and starts here are right in line with its 25 year average: