Today’s batch of housing data, namely the December update of housing starts and permits, which as a reminder has a quite substantial “confidence interval” was relatively uneventful. Total housing starts of 1,149K was a drop from last month’s upward revised 1,179K, and a miss to the 1,200K expected. This was due to a drop in both 1-unit structures, which declined from 794K to 768K in all regions by the Northeast, as well as a decline in multi-family, or rental, units which declined from 378K to 365K, which however declined across all four regions.

The silver lining to the Starts miss was the Permits print, which at 1,232K beat expectations of 1,200K, although the December number was likewise a drop from the November 1,282K. And while rental unit permits dropped by a notable 13.5% to 455K, the single-family permit rose by 1.8% to 740K – this was the highest single family permit print since 2007.

Then again as the charts above show, both Starts and Permits for single-family units have barely regained half their losses since the housing bubble burst in 2007.

Finally, keep in mind this is a very lagging indicator, and while we expect rental construction will continue to grow, now that the Chinese bid is being pulled away from the US market following the Treasury crackdown, we would not be surprised if the construction for single-family homes has now peaked.