The August housing starts and permits confirmed the recovery in this cyclical sector. Housing starts rose by 2.3% in August to a 750 000 annual rate, following a downwardly revised 733 000 in July, earlier reported as 746 000. Permits fell 1% to 803 000 annual rate following a virtually unrevised 811 000 previously. Single family starts, the most stable sub-index, increased by 5.5% to 535 000 annual units, the highest rate since October 2008, when the period of special tax incentives is disregarded. The increase was broad-based including all four regions. Multifamily starts, the volatile sub-sector, on the contrary declined by 4.9% (215 00 annual pace).
Positively, these robust figures came on the tables despite adverse weather conditions in large parts of the US. Permits while slightly lower than in July, when they rose quite well, are still in a nice uptrend and are higher than starts suggesting the latter still have some catching up to do. Concluding, the housing data confirm that the activity is still strengthening and thus should contribute positively to GDP growth.