US residential construction activity expected to rise

Consistent with the snapback in construction hours worked, the number of new housing units started probably climbed by 2.0% to a seasonally adjusted annual rate of 1.23 million in August - the strongest activity since October 2007. Last month's anticipated rise is expected to be fueled by a rebound in multifamily building during the reference period. Multifamily starts likely jumped by 6.1% to 450,000, a touch above the 437,000 average posted over the May-July span. 

Core single-family starts are projected to be little changed at 780,000 last month, holding on to almost all of July's impressive 12.8% gain. Echoing the composition of housing starts, the number of new building permits issued probably edged 0.9% higher to 1.14 million - the level prevailing in April before a tax-related surge in multifamily issuance in New York State. 

"Our August forecasts support our call for a sharp reacceleration in residential investment spending during the summer quarter", says Societe Generale.