Housing Permits, Starts Surge Driven By Renewed Rental Housing Scramble

Starts:

And Permits:

So is this the housing recovery everyone's been waiting for? Sadly, no, because one glance at the internals reveals that virtually all of the surge higher was on the back of multi-family housing units. Specifically, in permits, virtually all of the rise was due to multi-family, aka rental, unit construction, which soared by 73K, from 309K to 382K, a 24% increase, while single family, residential, units were up by a tiny 6K, or less than 1%.

Start was more of the same, because while single-family units here did post a modest improvement, rising to 656K, it well below the 710K highs reached in November 2013, all of the action was again in multi-family units, which exploded higher by a whopping 33% in one month, from 318K to 423K. This just happens to be the highest print since Lehman and matches the other highest mult-fam housing record in the past decade from January 2006, when the same number of multi-family housing units was started.

Finally, considering just how volatile this series has become, don't be surprised if in September the July data is revised wildly lower considering the wild margin of error, especially on the Starts side, where the "final" data point is within 11% of the presented number.

by Tyler Durden on 08/19/2014