Last Update: 19-Aug-14 09:08 ET
- Housing starts increased 15.7% in July to 1.093 mln from an upwardly revised 945,000 (from 893,000) in June. The Briefing.com consensus expected housing starts to increase to 964,000.
- The big news out of the housing data was an 8.3% increase, to 656,0000, in single-family construction. New single-family construction levels declined in both May and June after reaching roughly 650,000 in April. Since single family construction trends are typically stable, the two month decline suggested that housing construction may have peaked. While it is possible that the July gain could be a one-off rebound, it gives hope that the overall housing outlook may be on stronger footing then once thought.
- Multifamily construction increased 28.9% to 437,000 in July. That was the most new multifamily homes since 450,000 multifamily units were started in January 2006. These levels are not sustainable and will likely decline next month.
- The number of units under construction increased 2.9% to 786,000 in July from 764,000 in June. The gain will be a net positive for third quarter GDP, but the contribution to growth may not be as high as the headline suggests. Most of the increase in the number of units under construction came from the multifamily sector (+4.8%), which contributes less to overall construction growth per unit than single family construction.
- The strong gain in single-family construction follows improvements in the NAHB Housing Market Index. Construction growth may be more stable than previously thought.