Housing improved in July – but well short of expectations. Housing starts in July posted a modest comeback, rising 1.7 percent after an 8.7 percent decrease in June. The July annualized pace of 0.546 million units came in below the median forecast for 0.565 million units and is down 7.0 percent on a year-ago basis. In fact, the latest number is also down fractionally from the initial June estimate of 0.549. That is, July would have been a decline instead of a rebound were it not for a downward revision to June.
The July improvement was led by a 32.6 percent bounce back in multifamily starts, following a 33.3 percent drop in June. The single-family component-weighed down by inventories-declined 4.2 percent after dipping 1.7 percent in June.
By region, the gain in starts was led by a 3.9 percent rebound in the South. Other regions declined-the Northeast, down 25.9 percent; the West, down 4.9 percent; and the Midwest, down 1.1 percent.
Looking ahead, permits fell back 3.1 percent, following a 1.6 percent rebound in June. Overall permits stood at an annualized rate of 0.565 million units and are down 3.7 percent on a year-ago basis.
The housing sector improved modestly in July at the headline level. But it largely was a technical rebound in the multifamily component. Single-family construction is slipping as indicated by both starts and permits. Equity futures eased modestly on the news.