When it comes to housing construction, I’ve been waiting for the last domino to fall. Once again in July, it didn’t.

Freepik

Total housing starts rose 3.9%, but are -19% below their peak. Permits rose 0.1%, but are 22% below their peak. Units under construction, which is the “real” economic activity, rose 0.4% and is slightly, as in -2.7%, off its peak:

Single family permits are the most leading and least noisy data point. They were essentially flat, and both starts and permits are off about -25% from their respective peaks. Single family units under construction declined all of 5,000, and are -18.4% below their peak:

With the huge increase in the prices of houses after the pandemic, action shifted to multi-family units. Permits and starts for these were virtually unchanged last month. While permits are down -33% and starts are down -25% from their respective peaks, multi-family units under construction made yet another new all-time high:

The pace of construction for these multi-family units has barely slowed down at all:

Historically you have needed about a -10% decline in housing under construction before a recession actually began. Once again in July, the final domino - multi-family units under construction - did not fall. I suspect no recession will begin until it does.

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