US Housing Starts Drop 9% in September, Miss Expectations on Multifamily Weakness

3-line summary

• US housing starts fell to a seasonally adjusted annual rate of 1.221 million in September, down 9% year-over-year on a non-seasonally-adjusted basis, missing the 1.305 million consensus forecast; single-family starts rose about 2% year-over-year while multifamily starts fell 28%, with the miss attributed entirely to the multifamily segment as single-family performed relatively well.
• Building permits fell about 4% year-over-year overall, with single-family permits down 6% (breaking a modest summer uptrend) and multifamily permits roughly flat; completions fell about 14% overall, down 11% for single-family and 21% for multifamily. Regionally, the South (+7%) and Midwest (+1%) rose while the Northeast and West declined.
• The data is seen as affecting building-products and homebuilder stocks, including Builders FirstSource, James Hardie, CRH, Vulcan Materials, Martin Marietta, D.R. Horton, Lennar, PulteGroup, NVR, Toll Brothers, Meritage, and KB Home, with completions figures also relevant to Installed Building Products.

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