TSX:WFG - Post Discussion
Post by
retiredcf on Sep 20, 2023 9:10am
RBC Notes
Starts below consensus, but single-family relatively better than headline
Impact: somewhat negative — The U.S. Census Bureau released new residential construction statistics for August. Housing starts were below expectations at 1,283k SAAR (vs. consensus at 1,440k SAAR), while housing permits were above expectations at 1,543k SAAR (vs. consensus at 1,438k). Single-family starts of 941k SAAR were down 4.3% m/m, but aside from May and July 2023, were the highest of any other month since August 2022. Multi-family starts (five units or more) of 334k SAAR were down 26.3% m/m and down 41.0% y/y. Homebuilder confidence fell 5 points m/m to 45 in September, following a drop in August.
Highlights
August U.S. housing starts of 1,283k (SAAR) were below consensus of 1,440k (SAAR) — Total starts were down 14.8% y/y and 11.3% m/m from the revised July figure of 1,447k (revised down from 1,452k SAAR). In August, single-family starts were down 4.3% m/m, but up 2.4% y/y and represented 73.3% of total starts (vs. 61.1% in August 2022). The higher proportion of single-family new residential construction is significant since single-family housing starts typically consume 3x the amount of wood products vs. multi-family starts. On a regional basis, the South represented 58.1% of total starts vs. 21.9% in the West, 12.5% in the Midwest and 7.6% in the Northeast. On a y/y basis, starts were down 6.1% y/y in the South, down 20.2% y/y in the West, down 12.1% y/y in the Midwest, and down 45.5% y/y in the Northeast.
U.S. housing permits of 1,543k (SAAR) were above consensus of 1,440k (SAAR) — Total permits were down 2.7% y/y but up 6.9% m/m from the revised July figure of 1,443k (revised up from 1,442k SAAR). Single-family permits of 949k were up 7.2% y/y and up 2.0% m/m (and were the highest of any month since October 2022), while multi-family permits (two units or more) of 594k were down 15.3% y/y but up 15.8% m/m. Single-family permits represented 61.5% of total permits.
U.S. housing completions were up 5.3% m/m — August completions of 1,406k (SAAR) were up 3.8% y/y and up 5.3% m/m from the revised July figure of 1,335k. Single-family completions of 961k (SAAR) were down 5.8% y/y and down 6.6% m/m, while multi-family completions (five units or more) of 433k (SAAR) were up 32.0% y/y and up 45.8% m/m. Single-family completions represented 68.3% of total housing completions.
Building material sales down y/y — According to the U.S. Census Bureau, category advance retail sales were $41.5B in August, up 0.1% m/m but down 4.9 % y/y.
Canadian housing starts were above expectations — According to the CMHC, Canadian housing starts (SAAR) of 253k units in August were above the FactSet consensus of 245k units. Total starts (SAAR) were down 1.0% m/m from July. In urban areas, single-family starts increased 1.7% m/ m, while multi-family starts were down 1.4% m/m.
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