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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.


Single-Family Housing Starts Jump to New High in July

Housing permits and starts were strong across the board in July, with single-family starts leading the way, up 12.8% off an already elevated June level. Housing permits declined in July, with single-family permits down 1.9% and multi-family permits down a scary-sounding 31.8%. Multi-family starts were down 17.0%.

However, the permit and multi-family starts declines all came off quite elevated June levels, so that July levels for all these indicators were still well above the prevailing levels of 2014. It is also worth noting in passing that the vast bulk of the July decline in multi-family permits came from the Northeast, where a tax benefit expired after having elevated permits in May and June.

We have been downbeat on the US economy this year, emphasizing the manufacturing softening that looks still to be in place. However, we have had to acknowledge that housing in particular, and, lately, construction in general have worked to offset much of the drag on growth from manufacturing. After no growth in 2013 and most of 2014, housing construction started rising in late-2014, and today’s data for July suggest further increases in housing activity in the second half of 2015.

Now, as seen in the accompanying chart, single-family permits and new-home sales have not as yet attained levels that would confirm the recent gains in starts. Furthermore, US owner-occupancies continue to decline, suggesting that most of the demand for new housing is speculative. Still, there is no arguing with the fact that today’s news is bullish for homebuilding activity in the second half of 2015.

Single-Family Homebuilding
Single-Family Homebuilding
Chart Source: Census Bureau. As of 31 Jul 15

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.

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