Weekly Economic Report

Weekly Economic Report 08.21.2018

KEY MARKET INDICATORS as of Aug 21, 2018

Weekly Economic Report

July Housing Starts

Homebuilding activity moved sideways in July after a sharp pullback in June. Compared to June, July housing starts increased by less than 1 percent to a seasonally adjusted annual rate of 1.17 million units. Both single-family and multi-family starts increased by around 1 percent in July. Housing starts for the past two months represent the lowest levels of activity for the year, and are around 100,000 units below the year-to-date trend.

With two months of lower housing starts, does this point to a break in the housing recovery? Not necessarily. For the year so far, we are still looking at a run rate of 1.27 million units of housing starts, which is around 90,000 units ahead of last year’s pace. Single family housing starts for the year are also up from the level a year ago. One possible reason for the recent slowdown is that the West region, which accounts for almost 30 percent of homebuilding activities, has seen homebuilding activities up 14 percent compared to last year for the year so far. This may have stretched homebuilders’ capacities for new projects, so a lower pace of activities for the second half should help homebuilders catch up before ramping up activities again. For now, a temporary slowdown is still the most likely scenario.

Weekly Economic Report

Tian Liu, Genworth Mortgage Insurance Chief Economist
tian.liu@genworth.com
919 807.9584

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