Housing starts plummeted in August.
Starts fell 14.4% to an annualized rate of 956,000. This is the biggest drop since April 2013.
Economists were expecting the pace of starts to decline 5.2% to 1.04 milion.
Building permits dropped 5.6% to an annualized rate of 998,000, which was worse than the 1.04 million rate expected.
Economists warn we shouldn’t freak out about this report.
“In one line: Less bad than the grim headlines, but still soft,” Pantheon Macroeconomics’ said. “The trend, as far as we can tell, is about flat following the winter plunge and spring rebound.”
“Because the housing starts data are volatile on a monthly basis, these data do not change our view that a moderate housing recovery remains on track,” Barclays’ Dean Maki said. “One way to see this is by looking at y/y changes; single-family starts rose 4.2% y/y in August, while multifamily starts rose 16.8%.”
Here’s the Census:
Privately-owned housing units authorised by building permits in August were at a seasonally adjusted annual rate of 998,000. This is 5.6 per cent (±1.4%) below the revised July rate of 1,057,000, but is 5.3 per cent (±1.7%) above the August 2013 estimate of 948,000.
Single-family authorizations in August were at a rate of 626,000; this is 0.8 per cent (±1.5%)* below the revised July figure of 631,000. Authorizations of units in buildings with five units or more were at a rate of 343,000 in August.
Privately-owned housing starts in August were at a seasonally adjusted annual rate of 956,000. This is 14.4 per cent (±7.9%) below the revised July estimate of 1,117,000, but is 8.0 per cent (±11.2%)* above the August 2013 rate of 885,000.
Single-family housing starts in August were at a rate of 643,000; this is 2.4 per cent (±9.7%)* below the revised July figure of 659,000. The August rate for units in buildings with five units or more was 304,000.
Here’s a break down of starts by size and region.