U.S. July Housing Starts and Permits - Mixed but broader picture near neutral
July housing starts with a 12.4% decline to 1.239m contrast a rise in permits of 5.0% to 1.443m, though the plunge in starts follows a 19.7% rise in June while the rise in permits follows a 2.6% decline in June. Starts remain above May’s level while permits are the strongest since February.
Starts saw multiples decline by 16.8% and singles fall by 9.9%, but the singles move is more unusual with the multiples move modest compared with the swings seen in May and June.
It is likely that the fall in single starts, to the lowest level since November 2022, is erratic, with single permits up by 2.5% after a 2.2% fall in June and with little direction to trend.
Multiple permits increased by 9.4% to more than fully reverse two preceding declines. Unusually hot weather may have pushed starts below permits in July.
Trends in the housing sector have generally been subdued to negative in recent months though the NAHB homebuilders’ survey did see a modest bounce in August, which does fit with a slightly firmer message from permits.
That fears of Fed tightening are fading may provide the sector with some support, but will probably do little more than keep trends neutral and reduce downside risk.
