US Housing Starts in July

Housing made somewhat of a comeback in July and taking into account wet weather on the east coast should be taken as stronger than face value. Housing starts in July rebounded 5.9 percent after falling 7.9 percent in June. The July starts annualized level of 0.896 million units nearly matched the consensus forecast for 0.900 million units and was up 20.9 percent on a year-ago basis.  The boost in starts was led by a monthly 26.0 percent jump in the volatile multifamily component after a 24.8 percent fall in June. The single-family component dipped 2.2 percent after rising 1.2 percent the month before. By region, the gain in July starts was led by the Northeast with a monthly 40.2 percent surge, followed by gains of 25.4 percent in the Midwest and 7.2 percent in the West. The South declined 7.0 percent on the month. Permits returned to a moderate uptrend. Permits made a 2.7 percent comeback after dropping 6.8 percent in June. July's annualized pace of 0.943 million units was up 12.4 percent on a year-ago basis. Market expectations were for 0.935 million units for July permits. Housing data are weak currently due to atypically wet weather on the east coast and there is uncertainty from mortgage rates going up from worries about Fed tapering. But the trend still appears to be a moderate uptrend-especially as short supply of houses on the market is boosting construction.

Housing starts retrenched sharply in June on a downswing in the volatile multifamily component. And atypically wet weather likely weighed on starts. Housing starts in June fell back 9.9 percent, following an 8.9 percent surge in May. The June starts annualized level of 0.836 million units was up 10.4 percent on a year-ago basis. June's starts level was the lowest since August 2012. The decrease in starts was led by a monthly 26.2 percent drop in the multifamily component after a 28.2 percent jump in May. The single-family component slipped 0.8 percent, following a 0.5 percent rise in May. Permits also dropped sharply on a plunge in the multifamily component. Permits fell 7.5 percent in June after dipping 2.0 percent the prior month. June's annualized pace of 0.911 million units was up 16.1 percent on a year-ago basis. Source  Bloomberg