Building Permits and Housing Starts are always reported on the same day, but today's report for the month of August was one of the more bizarre ones we've seen in some time. While Building Permits topped consensus forecasts by 100K (1.54 million vs. 1.44 million), Housing Starts had a big miss coming in at just 1.28 million versus forecasts for a pace of 1.44 million. In the case of Starts, it was the biggest miss relative to expectations since February 2019 and the weakest monthly print since June 2020. In terms of the divergent results relative to expectations, going back to at least 2002, it was the first time that either Building Permits or Housing Starts missed expectations by at least 100K while the other beat forecasts by at least 100K.

As shown in the table below, all of the strength and weakness in this month's report was due to fluctuations in multi-family units. While multi-family starts were down 26% m/m, multi-family permits were up 16% m/m. Single-family units, meanwhile, were much more restrained with starts down just 4% while permits were up 2%. Thus, what looked like a very volatile report at the surface was more grounded below the surface.

Looking at Housing Starts on a 12-month average basis shows that activity has slowed sharply over the last year. At an average of 1.41 million over the last twelve months, total Housing Starts were the lowest in August since February 2021.

Again, while overall starts and permits have been driven by swings in multi-family units, both single-family permits and starts have actually started to stabilize and turn higher over the last two months. If that trend can continue in the months ahead, it would be a positive shift in the trend.

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