Despite the hype of tumbling interest rates and rising mortgage applications, housing starts tumbled again in May, dropping a whopping 4.0% MoM in July to 1.191MM, the biggest drop and the lowest print since February, drastically missing expectations for a 0.2% rise as a result of a 17.2% crash in multi-family units. The silver lining: permits jumped by a much better than expected 8.4% MoM, rising to 1.336MM from 1.232MM, keeping the series roughly flat for the past three years.

Continuing a trend observed in recent months, the weakness in starts was largely due to multi-family units, which plunged from 366K to 303K annualized, a whopping 17.2% drop to the lowest level since August 2017, even as single family units remained relatively flat, and rose 1.3% in July.

On the other end, and in a mirror image to the permits picture, the better than expected print for permits, at 1.336MM, above the 1.270MM expected, was thanks to a massive spike in multi-family, or rental units, which surged by 24.8%, even as single-family permits were also barely changed at 1.8%.