Aug Housing Starts totaled 598k annualized, almost 50k higher than expected and up from a revised 541k last month (from 546k). Permits totaled 569k and were 9k above estimates. Most of the gain in Starts was led by multi family as they rose 32% m/o/m while single family starts rose by a more modest 4.3%. Multi family also drove the m/o/m rise in permits as single family permits fell to the lowest since Apr ’09. Thus, while the S&P’s bounced on the data, single family permits dropping to 16 month lows is a not a precursor to a pick up in building of new homes. With a still large overhang of existing homes for sale and in foreclosure, that is a good thing from an inventory perspective. With home ownership rates in a secular decline however, the rise in multi family building will likely be a long term trend.
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