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Economy in Brief

U.S. Housing Starts Decline as Multi-family Starts Weaken
by Tom Moeller  August 16, 2019

New building activity fell for the third straight month during July. Housing starts declined 4.0% (+0.6% y/y) to 1.191 million (SAAR) after falling to 1.241 million in June, revised from 1.253 million. Starts in May also were revised slightly lower to 1.264 million, down from 1.270 million in April. Starts have fallen 10.8% since the peak in January 2018. The Action Economics Forecast Survey expected 1.260 million starts during July.

A drop in starts of multi-family housing units led the total lower during July. They declined 16.2% (-2.8% y/y) to 315,000 from 376,000 in June, revised from 406,000. Countering this decline, starts of single-family homes edged 1.3% higher last month (1.9% y/y) to 876,000 units from 865,000 in June, revised from 847,000.

The decline in housing starts during July reflected weakness across the country. In the Northeast, starts fell by 13.8% (-8.7% y/y) to 94,000 units, after surging 26.7% in June. Starts in the Midwest declined 6.2% (+1.7% y/y) to 181,000, but remained up sharply since a March low. Housing starts in the South fell 4.3% (-4.0% y/y) to 600,000, the lowest level since October 2018. In the West, starts edged 1.3% higher last month to 316,000 (13.7% y/y) after declining for three straight months.

Building permits increased 8.4% last month (1.5% y/y) to 1.336 million from an upwardly revised 1.232 million in June. Permits to build a single-family home rose 1.8% (-3.8% y/y) to 838,000, the highest level in six months. Multi-family building permits surged 21.8% (11.9% y/y) to 498,000 and made up June's sharp decline. Permits data back through 2013 were revised.

The housing starts and permits figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.

Housing Starts (000s, SAAR) Jul Jun May Jul Y/Y % 2018 2017 2016
Total 1,191 1,241 1,264 0.6 1,250 1,209 1,178
  Single-Family 876 865 814 1.9 873 852 786
  Multi-Family 315 376 450 -2.8 377 357 392
Starts By Region
  Northeast 94 109 86 -8.7 111 111 116
  Midwest 181 193 158 1.7 171 180 185
  South 600 627 705 -4.0 631 603 585
  West 316 312 315 13.7 336 314 292
Building Permits 1,336 1,232 1,299 1.5 1,330 1,286 1,207
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