19 September 2023
The NAHB sentiment survey hinted at a decline in housing starts, and they indeed dropped significantly by 11.3% MoM in August. In contrast, forward-looking permits unexpectedly rose by 6.9% MoM. This divergence saw the lowest starts since June 2020, while permits reached a peak not seen since October 2022. Notably, multi-family rental starts declined sharply, whereas single-family permits increased for the eighth consecutive month. Despite a drop in homebuilder sentiment, permits are rising, raising questions about the reasons behind this optimism and whether the Federal Reserve will intervene.