• Housing activity continues to recover following coronavirus shutdown.

• Building permits hit six-month high.

Improved activity in the housing sector continues to lead the economy out of recession. Housing starts strengthened 22.6% during July (23.4% y/y) to 1.496 million (SAAR) from 1.220 million during June, revised from 1.186 million. Despite these gains, total starts remain 7.5% below their January peak of 1.617 million. The Action Economics Forecast Survey expected 1.230 million starts in July.

Starts of single-family homes rose 8.2% last month (7.4% y/y) to 940,000 after surging 19.4% in June to 869,000, revised from 831,000. Multi-family starts strengthened 58.4% (65.0% y/y) to 556,000 in July from 351,000 in June, revised from 355,000.

Building permits improved 18.8% in July (9.4% y/y) to 1.495 million from 1.258 million during June, revised from 1.241 million. Permits to build single-family homes increased 17.0% (15.5% y/y) to 983,000 after improving 12.6% in June. Permits to build multi-family homes increased 22.5% (-0.6% y/y) to the highest level since January.

By region, last month's improvement in housing starts reflected a roughly one-third increase (63.5% y/y) in the Northeast to 157,000. The latest level was triple the April low. In the South, starts also rose by one-third both m/m and y/y to 830,000, the highest level since February. In the Midwest, housing starts rose 5.8% (15.5% y/y) to 201,000 after three months of firm gain. Starts in the West improved 5.8% (-3.1% y/y) to 308,000 but failed to recover June's decline.

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