skip navigation

By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.

August Housing Starts More of the Same No-Growth Story

August total housing starts showed a decline of 0.8%, but there was a 3.0% upward revision to July, so the August print was actually 2.6% above what was reported for July a month ago. The more important single-family starts component went in the reverse direction. It showed a 1.6% August gain but a 2.1% downward revision to July, so its August print was 0.6% below the month-ago announcement for July.

These swings are mostly noise. The real story is that single-family starts have gone nowhere for the last 10 months. Starts rose sharply last October but have failed to show any further net movement since then. As a result, single-family residential construction spending has gone flat in recent months as well.

Our bet is that homebuilding will continue flat through the rest of the year. Inventories of unsold new homes have risen enough that homebuilders will be loath to ramp up production any further unless and until demand rises first, and home demand has also been stubbornly flat, as evidenced by data on new-home sales. The picture within each major region of the country largely mirrors the nationwide profile.

With total and single-family starts data diverging so markedly, it is clear that multi-family starts continue to swing wildly, as is their wont. Beneath the short-term swings, multi-family starts have been trending lower for two years. The multi-family unit construction process is so protracted that multi-family construction spending has only recently headed lower. With that long gestation and with multi-family starts still declining somewhat, however, the declines in multi-family construction spending will continue for quite a while. Still, multi-family construction accounts for less than 20% of total spending on new housing construction, so the overall trend in homebuilding will be dominated by single-family construction, and there, again, the trend is steady but flat.

Sales and Starts of New, Single-Family Homes
Sales and Starts of New, Single-Family Homes
Census Bureau. As of 31 Aug 17

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 45 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

Sign up to receive email updates as new reports are released.

© Western Asset Management Company, LLC 2022. This publication is the property of Western Asset and is intended for the sole use of its clients, consultants, and other intended recipients. It should not be forwarded to any other person. Contents herein should be treated as confidential and proprietary information. This material may not be reproduced or used in any form or medium without express written permission.
Past results are not indicative of future investment results. This publication is for informational purposes only and reflects the current opinions of Western Asset. Information contained herein is believed to be accurate, but cannot be guaranteed. Opinions represented are not intended as an offer or solicitation with respect to the purchase or sale of any security and are subject to change without notice. Statements in this material should not be considered investment advice. Employees and/or clients of Western Asset may have a position in the securities mentioned. This publication has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation or needs. It is your responsibility to be aware of and observe the applicable laws and regulations of your country of residence.
Western Asset Management Company Distribuidora de Títulos e Valores Mobiliários Limitada is authorized and regulated by Comissão de Valores Mobiliários and Brazilian Central Bank. Western Asset Management Company Pty Ltd ABN 41 117 767 923 is the holder of the Australian Financial Services Licence 303160. Western Asset Management Company Pte. Ltd. Co. Reg. No. 200007692R is a holder of a Capital Markets Services Licence for fund management and regulated by the Monetary Authority of Singapore. Western Asset Management Company Ltd is a registered Financial Instruments Business Operator and regulated by the Financial Services Agency of Japan. Western Asset Management Company Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) (FRN 145930). This communication is intended for distribution to Professional Clients only if deemed to be a financial promotion in the UK as defined by the FCA. This communication may also be intended for certain EEA countries where Western Asset has been granted permission to do so. For the current list of the approved EEA countries please contact Western Asset at +44 (0)20 7422 3000.