• August housing starts were up 9.2 percent from July and 9.4 percent from a year ago, according to the U.S. Census Bureau.
• New residential construction permits — an indicator of future housing supply — were down 5.7 percent from July and 5.5 percent from a year ago. Permit activity was weak for both single-family home construction and multifamily home construction.
• Housing completions were up 2.5 percent from July and 11.2 percent above August 2017 levels.

Residential construction permits are the most reliable indicator we have of the new housing supply pipeline – and right now, that pipeline feels broken. Today’s data showing the slowest multifamily pace of permitting in more than two years, an indication that apartment developers may finally be easing off the gas, will be welcome news for landlords and property managers wary of slowing rent growth. But slower single-family permits is not what we would expect given the underlying economic fundamentals. After marching slowly, haltingly, but steadily higher since 2012, single-family permits began to slow late last year, stuck around their lowest levels since the 1980s. In the past couple of months, slower permitting is showing up in the number of homes under construction or being completed. At a time when the homeownership rate remains low, particularly among young adults, this is not what we would expect. Demand from home buyers remains high, which is helping push prices up at rates well above historic norms, but builders either cannot or will not increase their pace to keep up with it. Meanwhile, permits and activity in the multifamily segment have been holding steady at very high levels not seen since the early 1970s – the number of multifamily units under construction is currently at its highest level since the early 1970s, despite flat or falling rents in much of the country. Housing supply is notoriously slow to shift in response to changing price signals, like turning a massive ship amid the fog of incoming data, but the housing market trends we’re seeing right now are more than a wide turning radius. When it comes to new home building, it feels more like the engine is broken.

Note: An earlier version of this piece incorrectly stated that current multifamily permitting was at its slowest pace in four years. Multifamily permits dropped briefly in March 2016, but quickly rebounded. This piece has been updated to reflect this two-year time frame. March 2016 aside, today’s data showed multifamily permits at their slowest pace since August 2014.