If there is one main theme in the just released February housing starts and permits data, it is that while total starts continued declining, missing expectations of a 910K print, instead dropping from an upward revised 910K to 907K, the third month in a row of declines after peaking at 1,101K in November, with single-family unit starts of 583K, virtually unchanged from the 591K level first seen in September 2012, it was the epic bifurcation in Housing Permits between single-family housing and rental (or multi-family units) that is the highlight. Yes, the headline Permit number of 1,018K beat expectations of 960K rising from January's revised 945K, but it was the composition that was the story - to wit, single-family permits dropped from 599K to 588K which just happens to be the lowest number since January of 2013, but this ongoing drop in single family was more than offset by multi-family permits, which soared to 407K - the highest number since the 540K peak recorded in June of 2008!
In other words, builders and investors appear to have given up on any growth in single-family demand, made obvious by the decade-low collapse in mortgage applications, and instead everyone is betting that the last vestige of a "housing recovery" will focus merely on rental properties. We can only hope that Americans have enough disposable income to validate this thesis.
Total Housing Starts and sequential change:
[4]
Broken down by Single and Multi-Family units:
[5]
And Total Permits, seasonally adjusted and actual:
[6]
... and finally broken down by Single and Multi-family. Not the surge in rental permits.
[7]