US Macro Updates

Key takeaway: New US Home Construction continues to be fairly resilient. Building Permits in October were at a SA annual rate of 1.487mn. That was 1.1% above the September level of 1.471. The notable point was that Single Family Housing units continue to rise as has been the trend in recent months. Building Permits for Single Family Housing Construction were at a SA annualized level of 968K units. This is significantly above the Dec 2022 low of 750K units and also above pre-pandemic averages. Similarly, Housing Starts in October were at a SA annualized rate of 1.37mn – 1.9% above the September level of 1.346mn units. Once again, similar to the Building Permits data, Single Family Housing starts are also continuing their recent uptrend. Single Family Housing Starts at 970K are significantly above last year’s low of 800K and also above pre-pandemic averages. The shortage of existing home sales continues to drive buyers towards new homes – despite the rise in mortgage rates. Home builders, even though recent surveys pointed to low confidence levels, continue to invest in building new homes in the expectation that demand will continue to remain resilient. 

• Building permits increased 1.1% in Oct to a SA annual rate of 1.487mn units.
• Housing starts increased 1.9% in Oct to a SA annual rate of 1.372mn units

18th Oct 2023

Key takeaway: The Housing Starts and Building Permits data release for September 2023 was a mixed bag, similar to August. Housing Starts recovered from the sharp fall registered in August. Housing Starts rose 7.0% from a revised 1.269mn in August to 1.358mn in September. Single family housing starts at 963K were substantially below 2021 highs but still similar to pre-pandemic levels. On the other hand, multi family housing starts registered a sharp increase in September from 327K to 383K. However, not only is this level substantially below 2021 levels it is also below pre-pandemic levels. Building Permits, similar to Housing Starts, recorded reverse movements compared to the previous month. Building Permits fell from a SA annual rate of 1.54mn units in August to 1.47mn units in September. The key point to note here is that Building Permits for single family units have increased in every single month in 2023. Building Permits for multi family units have slowed since the highs of 2022.  

• Building permits decreased 4.4% in Sep to a SA annual rate of 1.473mn units.
• Housing starts increased 7.0% in Sep to a SA annual rate of 1.358mn units

19th Sep 2023

Key takeaway: The Housing Starts and Building Permits data release for August 2023 was a mixed bag. Housing Starts fell sharply (11.3%) from 1.45mn in July to 1.28mn in August. Building Permits, on the other hand, recorded an increase from 1.44mn in July to 1.54mn in August. However, the sharp fall in Housing Starts was key to note, since it comes on the back of a sharp fall in the Home Builders sentiment index recorded just a few days back. Conversely, the consolation prize in the data point was that the fall was mostly attributable to the multi family housing sector. Single family housing, which is the mainstay of the US residential real estate market, still remained fairly strong, dropping 4.3% to a SA annual rate of 941K units.  

• Building permits increased 6.9% in Aug to a SA annual rate of 1.543mn units.
• Housing starts decreased 11.3% in Aug to a SA annual rate of 1.283mn units

16th Aug 2023

Key takeaway: Housing Starts in July were at SA annual rate of 1.452mn units. This was 3.9% above the revised June estimate of 1.398mn units. However, its is also key to note that last month’s Housing Starts number had been revised down from 1.434mn units to 1.398mn units. Single Family Housing Starts increased 6.7% from the previous month and Multi Family Housing Starts were mostly flat. Building Permits in July were mostly flat compared to last month’s level. However, this does not takeaway from the fact that Housing Construction has experienced a significant resurgence throughout the first half of 2023. The Home Builders confidence index has also reflected a robust underlying new homes market (even though the latest reading in June showed a drop in the confidence index). Another noteworthy point (similar to recent few months), was the fact that activity in Single Family units segment seems to be performing even better.  

• Building permits increased 0.1% in Jul to a SA annual rate of 1.442mn units.
• Housing starts increased 3.9% in Jul to a SA annual rate of 1.452mn units

19th Jul 2023

Key takeaway: Housing Starts in June were at SA annual rate of 1.434mn units. This was 8% below the revised May estimate of 1.559mn units. However, Housing Starts had jumped 15% m-o-m in June. Hence some moderation in June was quite logical. Similarly, Building Permits in June were 3.7% below last month’s level. However, this does not takeaway from the fact that Housing Construction has experienced a significant resurgence throughout the first half of 2023. The Home Builders confidence index also reflects a robust underlying new homes market. Another noteworthy point (similar to last month), was the fact that activity in Single Family units segment seems to be performing even better. While overall Building Permits fell 3.7% in June, Building Permits for Single Family units actually grew 2%.  

• Building permits decreased 3.7% in Jun to a SA annual rate of 1.440mn units.
• Housing starts decreased 8.0% in Jun to a SA annual rate of 1.434mn units

20th Jun 2023

Key takeaway: After a couple of muted months in March and April, May was back to the start of the year trend of red hot activity prints in the US Residential market. Firstly, Housing Starts jumped an astounding 21% m-o-m in May to a SA annual rate of 1.63mn units. Even after factoring in the fact that April was revised down from +2.2% to minus 2.9%, the 21% jump is still noteworthy. Building Permits increased a substantial 5% as well. However, most noteworthy, was the fact that the large jump was attributable to the Single Family market. Over the past 6 months to a year, it has been the multi family units sector which had been most robust amid a slightly muted single family sector. However in May, Single family Housing Starts increased 18% m-o-m to a SA annual rate of 997K units.  

• Building permits increased 5.2% in May to a SA annual rate of 1.491mn units.
• Housing starts increased 21% in May to a SA annual rate of 1.63mn units

17th May 2023

Key takeaway: After red hot prints in Jan and Feb for new home building in the US, March and April caught a bit of a breather. Building permits in April were at a SA annual rate of 1.416mn units – 1.5% below the revised March rate of 1.437mn units. The general trend in the US Housing construction space had been a decline in single family units and in contrast, a resiliency in multi family units. For a second month in a row, however, Building Permits for multi family units (5 units or more) fell month over month (minus 9.7% in April). On the other hand, Housing Starts overall increased 2.2% month over month in April to 1.401mn units. However, March was revised much lower from its preliminary reading of 1.42mn units to 1.371mn units.   

• Building permits decreased 1.5% in Apr to a SA annual rate of 1.416mn units.
• Housing starts increased 2.2% in Apr to a SA annual rate of 1.401mn units

18th Apr 2023

Key takeaway: Both building permits and housing starts caught a breather in March after a couple of months of upside surprises. Building permits in March were at a SA annual rate of 1.41mn units – 8.8% below the revised Feb rate of 1.55mn. Similarly, housing starts also cooled to 1.42mn units in Mar – 0.8% below the revised Feb rate of 1.43mn units. The lower building permits were primarily on account of multi family residential units which fell 24% compared to the previous month. Similarly housing starts were also lower mostly on account of multi-family which fell 6.7% compared to the previous month of February. The multi-family segment within the US residential real estate sector was really the one that had held up thus far much better than single family homes. It will be interesting to watch both these sectors going forward for indications on the US real estate market. 

• Building permits decreased 8.8% in Mar to a SA annual rate of 1.41mn units.
• Housing starts decreased 0.8% in Mar to a SA annual rate of 1.43mn units

16th Mar 2023

Key takeaway: In yet another sign of a stabilizing US residential market, housing starts and building permits were both substantially up in February. Building permits increased a substantial 15% in Feb to a seasonally adjusted annual rate of 1.55mn. Similarly, Housing starts were up 9.8% in Feb to a SA annual rate of 1.45mn. Both indicators came in better than expected. 

• Building permits increased 15% in Feb to a SA annual rate of 1.55mn units.
• Housing starts increased 9.8% in Feb to a SA annual rate of 1.45mn units