Macro Report

**Flash Report – Housing Starts & Building Permits**

Takeaway:

While the housing/real estate market has floundered this year, construction data has been relative stable. Today’s housing starts data (orange) is another positive signal, with starts significantly beating expectations and reversing the recent trend lower. Permits (blue) came in under expectations but remain off the lows from earlier this year.

Notes:

November Housing Starts:

• 1,560k versus 1,360k expectations, and 1,359k(r) in October

November Building Permits:

• 1,460k versus 1,465k expectations, and 1,498k(r) in October

Following the rapid increase in interest rates, housing market data started a freefall due to potential affordability concerns. However, after the initial collapse, both starts and permits have levels off above 1H19 levels, signaling stable underlying demand buoyed by low existing inventories.

The most important relationship to watch for a switch from stable to growing is whether permits can follow through and push back above starts data going forward – this would suggest there is more construction in the pipeline.