Right now, housing and cars are carrying the US economy, in the face of a shallow industrial recession partly in the Oil patch, and partly about the strong US$. Yesterday’s housing report didn’t exactly make the situation clearer.

Here is the longer-term look at housing permits (blue) and starts (red) dating back to the beginning of 2008. Remember that starts tend to lag permits by a month or so, and starts are about twice as volatile as permits:

Sure enough, the spike in permits from May and June has fed through to higher starts.

Now let’s decompose permits into single family vs. multi-unit permits:

The tax credit program of 2009 stands out, as does the recent May-June spike in multi-unit permits brought about the expiration of a program in New York City. We can also see that multi-unit permits are much more volatile.

Now here is the close-up of the last 12 months:

The first thing to note is that single family permits have continued to increase, with September down by just 2,000 from August’s 6+ year high.

Secondly, the rush to beat the expiration of the NYC program has really played havoc with the multi-unit stats, including YoY stats. But almost certainly a significant percentage of the surge in May and June were permits that would have otherwise been issued in July and August.

If we add just 20% of the May-June surge to July and August, then multi-unit permits (ex-surge) still made new post-recession highs. (Recall that we hadn’t had 400,000+ multi-unit starts since the late 1980s).

The bottom line is that, while September was a decline from August, the longer-term trend of rising housing investment is almost certainly intact.