August Housing Starts totaled 598k annualized, right in line with expectations while the prior month was revised up by 8k to 589k. The gain m/o/m was solely led by multi family construction as single family starts fell and the same can be said about Permits. Permits were 579k, 4k below the consensus but July was revised up by 4k. Both Starts and Permits are at the highest since Nov ’08. Single family starts rose in the Midwest but fell in the Northeast, South and West. With respect to housing construction, the tax credit’s both nationally and in CA, have distorted the housing market in terms of determining what would have happened without them and in the context of an industry that still has too much inventory and didn’t need more building. The fate of the tax incentives are still to be determined but the NAR estimates that about 350k people of the 1.8-2mm that have used the credits to buy their first home would not have bought one without it.
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