Permits Miss Driven By Multi-Unit Buildings

Building Permits notably missed expectations in January, as they decreased -1.5% M/M (cons +1.3%) to 1470k annualized (cons 1512k) after a downwardly revised but already known +1.8% M/M in December. This was the biggest miss versus expectations since the November 2022 data (released in December 2022).

• The decrease was driven by multi-units, which came in at -7.9% M/M (455k annualized; vs +0.8% Dec). Single-family permits increased +1.6% M/M to 1015k annualzed (vs +2.3% Dec) but could not make up for the multi-unit decrease.
• The overall data continue to see particularly diverse monthly moves regionally, with the negative print driven by a stark -7.0% M/M decrease in the south, which is by far the largest out of the four main regions.
• On a longer-term view, building permits are hovering around levels seen in the last months before the pandemic.
• Housing starts printed an even bigger miss at -14.8% M/M (cons 0.0%). This was the biggest miss in M/M terms since May 2020, and the biggest decline since May 2020.
• In annualized terms housing starts were 1331k but saw the December figure clearly revised upwards to 1562k (from 1460k). Single-family starts have reversed their jump in November 2023 but are still on a general uptrend in line with permits which started in the beginning of 2023.

MNI, Census