In a mostly solid report that includes some effects from Hurricane Harvey, housing starts came in slightly higher than expected at a 1.180 million annualized rate. Starts in the South fell 7.9 percent in part reflecting Harvey's impact on Texas. Single-family starts are a major positive in the report, up 1.6 million to an 851,000 rate and offsetting a 6.5 percent decline for multi-family units to a 329,000 rate.
Turning to the other side of the report, permits came in decidedly stronger than expected at a 1.300 million rate and do not include any significant effects from Harvey. But strength in permits is confined to multi-family homes which surged 19.6 percent to a 500,000 rate with single-family permits the only real negative in today's report, down 1.5 percent to 800,000.
Revisions are positive with July starts upgraded to 1.190 from 1.155 million and July permits now at 1.230 vs an initial 1.223 million. Completions are another area affected by Harvey, falling 10.2 percent to 1.075 million with the South down 22.2 percent to a 491,000 rate.
Hurricane Irma will dominate the next report and its effects on Florida. But pending this impact and with two months in, the third quarter is outpacing the second quarter in both starts and permits. Overall, today's numbers are positive for a housing sector that is having trouble building momentum into year end.
Housing starts and permits have proven unexpectedly soft in 3 of the last 4 reports and have been dimming the chances for a strong finish to this year's housing sector, even before hurricane effects are considered. Cooling in multi-family starts and permits has been behind the weakness with resilience in single-family homes, despite give back in July, an underlining positive. Econoday forecasters are calling for an August rise in housing starts to a 1.173 million annualized rate vs July's 1.155 million. Housing permits are seen slipping slightly to a 1.220 million rate vs 1.223 million.