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Housing Starts Unexpectedly Soar In August as Housing Permits Crash

Housing starts rose 12.2 percent in August with permits down 10.0 percent. Revisions to starts were negative and permits positive.
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Housing data from Census Department, chart by Mish.

Housing data from Census Department, chart by Mish.

Wild Census Report

Please consider a wild Census Department report on New Residential Construction for August.

Building Permits 

  • Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,517,000. 
  • This is 10.0 percent below the revised July rate of 1,685,000 and is 14.4 percent below the August 2021 rate of 1,772,000. 
  • Single‐family authorizations in August were at a rate of 899,000; this is 3.5 percent below the revised July figure of 932,000. 
  • Authorizations of units in buildings with five units or more were at a rate of 571,000 in August. 

Housing Starts 

  • Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,575,000. This is 12.2 percent above the revised July estimate of 1,404,000, but is 0.1 percent (±9.6 percent)* below the August 2021 rate of 1,576,000. 
  • Single‐family housing starts in August were at a rate of 935,000; this is 3.4 percent (±10.1 percent)* above the revised July figure of 904,000. 
  • The August rate for units in buildings with five units or more was 621,000. 

Housing Completions 

  • Privately‐owned housing completions in August were at a seasonally adjusted annual rate of 1,342,000. 
  • This is 5.4 percent (±12.1 percent)* below the revised July estimate of 1,419,000, but is 3.1 percent (±10.5 percent)* above the August 2021 rate of 1,302,000.
  • Single‐family housing completions in August were at a rate of 1,017,000; this is 0.4 percent (±12.8 percent)* above the revised July rate of 1,013,000. 
  • The August rate for units in buildings with five units or more was 318,000.  

Confidence Level

I normally remove Census Department margin of error numbers such as "0.1 percent (±9.6 percent)" but I included them this month to highlight how much confidence the commerce department has in these numbers. 

Revisions

  • The Census Bureau revised July starts from 1.446 million to 1.404 million.  
  • That's a modest negative revision of 2.9%. 

Negative revisions have been the norm. And with homebuilder sentiment crashing, I expect more negative revisions to this data. 

Still, this data is nowhere near as strong as it looks. 

Housing Starts Single Family vs Multi-Family

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Housing Starts Single Family vs Multi-Family 2022-08

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  • Single-family starts crashed in July from 1.013 million to 0.904 million.
  • That's a decline of 10.8 percent
  • For August, the single-family rebound was only 3.4 percent (±10.1 percent) above the negatively revised July figure of 904,000. 

The vast majority of the August jump was multi-family. This will help rental supply but the data is quite negative for family formation. 

My guess is this data will be a net subtraction to GDP estimates, even as bond yields are soaring on the allegedly strong report.

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The housing crash is certainly not over. 

This post originated at MishTalk.Com

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