Renewed Fed Rate-Cut Hopes Spark Modest Rebound In Housing Starts/Permits In June

Housing Start s and Building Permits rose more than expected in June (+3.0% MoM and +3.4% MoM respectively) and May’s disappointments were revised modestly higher too (-4.6% MoM and -2.8% MoM respectively)…

Source: Bloomberg

That lifted the SAAR totals for both starts and permits just off their COVID lockdown lows..

Source: Bloomberg

The modest rebound in permits – forward-looking – appears to have been triggered by a renaissance in Fed rate-cut hopes…

Source: Bloomberg

Under the hood things are very uneven with multi-family unit permits and starts soared while single-family home permits and starts both declined…

Source: Bloomberg

Not a great picture for the housing market with four straight months of declines in single-family home construction plans (inventories high) and renter nation demand growing (inflation?).

• June single family starts -2.2% to 980K SAAR, lowest since Oct 2023

• June multi-family starts +22% to 360K SAAR, highest since Feb 2024

• June single-family permits -2.3% to 934K SAAR, lowest since early 2023

• June multi-family permits +19.2% to 460K, highest since Feb 2024

And as ‘Starts’ languish near COVID lockdown lows, ‘completions’ are at their highest since Jan 2007…

“If we build them, they will buy?” is not working…