Housing starts surged for the second consecutive month in July, and single-family starts are now only 10% below their pre-COVID level. Flight to the suburbs may explain some of the increase in activity, but we suspect record low mortgage rates and tight existing home inventory are the primary drivers. After all, multifamily starts and permits also surged. Interest rates and inventory are set to say low, but soaring lumber prices mean growth in single-family starts will slow over the remainder of the year.
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