Housing starts eased a bit in July after a strong June but permits showed moderate strength. Housing starts in July slipped 1.1 percent, following a 6.8 percent rebound the month before. The July pace of 0.746 million units posted slightly lower than the market expectation for 0.750 million and is up 21.5 percent on a year-ago basis.
In July, the dip was led by the single-family component which decreased 6.5 percent after a 4.7 percent rise in June. The multifamily component, however, increased 12.4 percent, coincidentally matching the gain in June.
By region, starts in July were led by a 17.0 percent jump in the Midwest Census region. Other regions slipped with the West down 5.3 percent, the South down 3.5, and the Northeast down 1.3 percent. Interestingly, all regions moved in their opposite direction from June, perhaps indicating that there is a slow underlying trend for improvement but with some monthly volatility.
Housing permits show moderate upward momentum. Permits rebounded 6.8 percent in July after a 3.1 percent decline in June. The July rate of 0.812 million units topped market expectations for 0.766 million units. Permit strength was led by multifamily but single-family also improved.
Today's report is net positive with starts close to expectations and permits notably above. With recently improved homebuilder sentiment corroborating, it looks like housing is on a modest uptrend. Equity futures were little changed on the news. Released at the same time, jobless claims were very close to expectations.