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Economy in Brief

U.S. Housing Retreats from 12-Year High
by Gerald D. Cohen  October 17, 2019

Building activity retraced some of last month's strength. Housing starts fell a greater-than-expected 9.4% in September (+1.6% year-on-year) to 1.256 million-unit annual rate, from an upwardly-revised 1.386 million in August. The August reading was the strongest pace since June 2007; though starts remain well below their January 2006 peak of 2.273 million. The Action Economics Forecast Survey expected 1.316 million starts during September.

A 28.2% drop in volatile multi-family starts drove the decline (-5.1% y/y). However, this followed a 41.4% jump in August and left activity multi-family sector slightly above its July level, but at the low end of the range it has been for the last two years. Meanwhile, single family starts edged up 0.3% in September (4.3% y/y), though still remain below the 11.5 year high reached this January.

Starts fell in all regions in September led by a 34.3% drop in the Northeast (-22.1% y/y). The Midwest fell 18.9% (-2.3% y/y). Starts declined 4.0% in the South (+18.6% y/y) and 1.9% in the West (-14.4%).

In contrast to starts, while building permits decreased they remained at an elevated level. Total permits declined 2.7% last month (+7.7% y/y) to 1.387 million from an upwardly-revised 1.425 million pace. Permits to build multi-family homes dropped 8.2% (+17.4% y/y) while single-family permits rose 0.8% (2.8% y/y).

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

The Fed's latest Beige Book covering regional economic conditions is available here.

Housing Starts (000s, SAAR) Sep Aug Jul Sep Y/Y % 2018 2017 2016
Total 1,256 1,386 1,204 1.6 1,250 1,209 1,178
  Single-Family 918 915 871 4.3 873 852 786
  Multi-Family 338 471 333 -5.1 377 357 392
Starts By Region
  Northeast 109 166 96 -22.1 111 111 116
  Midwest 167 206 173 -2.3 171 181 185
  South 676 704 618 18.6 631 603 585
  West 304 310 317 -14.4 337 314 292
Building Permits 1,387 1,425 1,317 7.7 1,330 1,286 1,207
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