As expected, the Census Department’s New Residential Construction report for December was another disappointment.
Building Permits
- Privately‐owned housing units authorized by building permits in December were at a seasonally adjusted annual rate of 1,330,000. This is 1.6 percent below the revised November rate of 1,351,000 and is 29.9 percent below the December 2021 rate of 1,896,000.
- Single‐family authorizations in December were at a rate of 730,000; this is 6.5 percent below the revised November figure of 781,000.
- Authorizations of units in buildings with five units or more were at a rate of 555,000 in December.
- An estimated 1,649,400 housing units were authorized by building permits in 2022. This is 5.0 percent below the 2021 figure of 1,737,000.
Housing Starts
- Privately‐owned housing starts in December were at a seasonally adjusted annual rate of 1,382,000.
- This is 1.4 percent (±16.9 percent) below the revised November estimate of 1,401,000 and is 21.8 percent (±11.2 percent) below the December 2021 rate of 1,768,000.
- Single‐family housing starts in December were at a rate of 909,000; this is 11.3 percent (±20.7 percent) above the revised November figure of 817,000.
- The December rate for units in buildings with five units or more was 463,000. An estimated 1,553,300 housing units were started in 2022. This is 3.0 percent (±2.4 percent) below the 2021 figure of 1,601,000.
Housing Completions
- Privately‐owned housing completions in December were at a seasonally adjusted annual rate of 1,411,000.
- This is 8.4 percent (±16.5 percent) below the revised November estimate of 1,540,000, but is 6.4 percent (±11.4 percent) above the December 2021 rate of 1,326,000.
- Single‐family housing completions in December were at a rate of 1,005,000; this is 8.0 percent (±11.6 percent) below the revised November rate of 1,092,000.
- The December rate for units in buildings with five units or more was 385,000. An estimated 1,392,300 housing units were completed in 2022. This is 3.8 percent (±3.3 percent) above the 2021 figure of 1,341,000.
Housing Starts Single Family vs Multi-Family
A year ago single-family starts were 1,212,000. This month they were 909,000.
Unadjusted Numbers
Unadjusted Numbers Year-Over-Year
- Starts: 124,000 to 97,000 Down 21.8 Percent
- Permits: 155,000 to 104,00 Down 32.9 percent
- Completions: 127,000 to 134,000 Up 5.5 percent
What a terrible year.
Signs Say Industrial Production Has Peaked and so a Recession is Imminent
In case you missed it, please see Signs Say Industrial Production Has Peaked and so a Recession is Imminent
Judging from dismal industrial production numbers, a recession is imminent if indeed it hasn’t already begun.
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cycle since WWII (including Covid-19’s). But there is a supply and demand issue. There’s a shortage of affordable single-family homes.
Link: “HOUSING IS THE BUSINESS CYCLE” Edward E.
Leamer
People have no perspective. Remember George Bailey’s “It’s a Wonderful
Life”? Or “the GI Bill comprising low interest, zero down payment
home loans, with more favorable terms for new construction compared to existing
housing. This encouraged millions of American families to move out of urban
apartments and into suburban homes.”
People
don’t have an historical clue. Lending by the DFIs is inflationary (where S “≠”
I). Whereas lending by the nonbanks is non-inflationary (where S = I), ceteris
paribus. Raising interest rates destroys R-gDp more so than inflation. It induces nonbank disintermediation, in the borrow short, to lend longer, savings>investment process. It drives the economy backwards.