- Housing starts in July ran at a seasonally adjusted annual rate of 1.206 million, up 0.2% from an upwardly revised 1.204 million rate (from 1.174 mln) in June. The July figure was pretty much in-line with the Briefing.com consensus estimate, which stood at 1.200 million.
- Building permits in July were at a seasonally adjusted annual rate of 1.119 million, which was 16.3% below the revised June rate of 1.337 million (from 1.343 mln) and well below the Briefing.com consensus estimate of 1.257 million. Single-family permits dipped 1.9% to 679,000.
- The upshot of this report is that the increase was powered by starts of single-family homes. They jumped 12.8% to 782,000, with increases seen in all regions. The Northeast was by far the strongest with a 66.7% increase in single-family starts, followed by the Midwest (+20.0%), the West (+16.6%), and the South (+3.8%).
- The big drop in permits is being attributed mainly to the expiration of a tax break for multi-family developers in New York, which put a serious drag on permit applications. That was evident in the fact that total permits in the Northeast were down 60.2% from June.
- The number of homes under construction jumped to 908,000 in July from 890,000 in June. Most of the month-over-month increase was led by single-family units, which is a positive consideration for Q3 GDP estimates since construction spending is higher on a per unit basis for single-family homes than it is in the multi-family sector.
Multifamily starts (i.e. 2 or more units) declined 17% to 424,000. That pullback was not entirely surprising considering the increase in June was the strongest since April 1988.
- Construction trends have recovered following the unusually cold winter and are back on their late 2014 accelerated pace.