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Economy in Brief

U.S. Housing Starts Rebound in August
by Tom Moeller  September 20, 2022

• Surprising increase reflects a jump in multi-family units.

• Regional changes are mixed.

• Building permits fall sharply.

New residential construction activity during August recovered all of its July decline. Total housing starts rose 12.2% (-0.1% y/y) last month to 1.575 million units (SAAR) after falling to 1.404 million units in July, revised from 1.446 million. Starts in June of 1.575 million were revised from 1.599 million. The Action Economics Forecast Survey had expected 1.45 million starts in August.

Leading last month's increase were multi-family starts. They surged 28.0% (33.1% y/y) to 640,000 following an 11.0% July decline. The latest level of multi-family starts was the highest since April 1986. Single-family starts rose 3.4% in August (-14.5% y/y) to 935,000 following five consecutive monthly declines.

Housing starts were mixed regionally. In the South, housing starts rose 24.5% (-0.3% y/y) to 885,000 following an 18.7% July decline. Starts in the Midwest strengthened 19.3% in August (-14.8% y/y) to 167,000 following a 32.0% July drop. Starts in the West rose 1.1% (10.7% y/y) to 361,000 after falling 2.7% in July. Moving lower last month were starts in the Northeast by 17.3% (-2.4% y/y) to 162,000 after surging 54.3% in July.

Building permits fell 10.0% (-14.4% y/y) to 1.517 million in August, the fourth decline in the last five months. Permits were at the lowest level since June 2020. Single-family permits weakened 3.5% (-15.3% y/y) to 899,000, the sixth consecutive monthly decline. Multi-family permits weakened 17.9% (-13.1% y/y) to 618,000, the lowest level in nine months.

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

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