Negative: Housing starts were below consensus expectations – The US Census Bureau released new residential construction statistics for July. Housing starts were below expectations at 1,446k SAAR (vs. consensus at 1,528k SAAR), while housing permits were above expectations at 1,674k SAAR (vs. consensus at 1,640k). Single-family starts of 916k were down 10.6% m/m while multi-family starts of 514k were down 10.0% m/m. Homebuilder confidence decreased for the eighth consecutive month to 49 on affordability concerns (high construction costs, increased interest rates).
July US housing starts of 1,446k (SAAR) were below consensus at 1,528k (SAAR) – Total starts were down 8.1% y/y and down 9.6% m/m from the revised June figure of 1,599k (revised up from 1,559k SAAR). For July, single-family starts were down 18.5% y/y, and represented 63.3% of total starts (vs. 70.4% in 2021 and 71.8% in 2020). The lower proportion of single-family new residential construction is significant since single-family housing starts typically consume 3x the amount of wood products vs. multi-family starts. On a regional basis, the South represented 49% of total starts vs. 25% in the West, 10% in the Midwest and 16% in the Northeast. On a y/y basis, starts were down 21.5% y/y in the South, down 11.8% y/y in the West, down 23.6% y/y in the Midwest, but up 228.6% y/y in the Northeast.
US housing permits of 1,674k (SAAR) were above consensus at 1,640k (SAAR) – Total permits were up 1.1% y/y but down 1.3% m/m against the June figure of 1,696k. Single-family permits of 928k were down 11.7% y/y and down 4.3% m/m, while multi-family permits of 746k were up 23.5% y/y and up 2.8% m/m. Single-family permits represented 55.4% of total permits.
Canadian housing starts were above expectations – According to the CMHC, Canadian housing starts (SAAR) of 275k units in July were above consensus of 260k units. Total starts were up 1.1% m/m from June at 272k units. In urban areas, single-family starts were down 2.3% m/m and multi-family starts were down 0.3% m/m.