Builders will be scrambling to sell completions. Expect bigger discounts.
The New Residential Construction Report for August shows a steep decline in permits and housing starts but a big jump in completions.
Building Permits
- Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,312,000. This is 3.7 percent below the revised July rate of 1,362,000 and is 11.1 percent below the August 2024 rate of 1,476,000.
- Single-family authorizations in August were at a rate of 856,000; this is 2.2 percent below the revised July figure of 875,000. Authorizations of units in buildings with five units or more were at a rate of 403,000 in August.
Housing Starts
- Privately-owned housing starts in August were at a seasonally adjusted annual rate of 1,307,000. This is 8.5 percent (±10.7 percent) below the revised July estimate of 1,429,000 and is 6.0 percent (±9.7 percent) below the August 2024 rate of 1,391,000.
- Single-family housing starts in August were at a rate of 890,000; this is 7.0 percent (±8.2 percent) below the revised July figure of 957,000. The August rate for units in buildings with five units or more was 403,000.
Housing Completions
- Privately-owned housing completions in August were at a seasonally adjusted annual rate of 1,608,000. This is 8.4 percent (±19.2 percent) above the revised July estimate of 1,483,000, but is 8.4 percent (±22.4 percent) below the August 2024 rate of 1,755,000.
- Single-family housing completions in August were at a rate of 1,090,000; this is 6.7 percent (±11.7 percent) above the revised July rate of 1,022,000. The August rate for units in buildings with five units or more was 503,000.
Note the Trends and Margins of Error
The margins of error in these reports are high. The Census Department does not have a lot of faith in these estimates and neither do I.
However, some trends are easy to spot. For example, permits keep dropping and are now down 31.7 percent from the January 2022 high of 1.92 million.
You can’t start what isn’t permitted.
Starts are down 28.2 percent from the April 2022 high of 1.82 million.
July Revisions
July revisions in starts and permits were negligible.
But the Census Department revised completions from 1,415,000 to 1,483,000. And now we have another big jump to 1,608,000.
Builders will need bigger discounts to sell any unsold inventory.
Housing Starts Single Family vs Multi-Family
Since April of 2023, total starts have fallen in a choppy manner. But note the path of single-family vs multi-family.
Since April of 2024, single-family starts are in a downtrend while multi-family has picked up.
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By incarcerating and deporting the bottom rung of our labor force, Trump has cut the legs out from under the entry level of the housing market. Move up buyers have no starter home buyers to take inventory off of their hands and rental income at the lower end of the market is faltering.
The cost to deport has been high and is getting higher.
Trumps private army of ICE agents are running out of victims and as the thugs they are will simply start attacking other groups that trump does not like.
Time to send the Statue of Liberty back to France…
<<<
The Fed cut but the 10Y didn’t care. The long duration is not a sign of high inflation. It’s a sign of a financial troubles, somewhere.
This story reeks of home builder stupidity. These builders rushed to construct homes in “Remote Work” locations where there are no good local jobs. Now, they are sitting empty while employees return to large coastal cities where their offices are.
At the same time, liberal think tanks keep publishing phony statistics showing “Remote Work” is here to stay.
How do you know from this data where all the homes are being built? You don’t. Your just putting forth an opinion without any data to back it up.
“Phony statistics” about RtW? From “liberal think tanks”? Wow, did someone else at the office get your favorite muffin this morning?
We live in a marketplace. Don’t like the houses being built? Don’t buy them.
Don’t believe in the housing statistics (from the Census, not think tanks)? Bet against the outcomes in the stock market.
But please spare the rest of us on the “liberal” conspiracy BS. It’s Hump Day, and we all have to get through it together
https://constructioncoverage.com/research/cities-investing-most-in-new-housing
Few homes are being built in California( LA/OC, SF ), New York( NYC ), Massachusetts( Boston ), Illinios( Chicago )… these places have the big money jobs … people are returning to these states to keep their job.
Thanks for the link; interesting info
BUT it says zero about RtW, much less that’s the specific reason few homes are being built anywhere in the US.
And those five cities you noted are known for already being full of housing w/ ‘big city’ cost issues. We should expect more building elsewhere, period. You are confounding causation and correlation.
And Wolf has educated you already multiple times on your RtW thesis. The total number of such workers is still historically high. But now you’ve moved your personal point of view hubris to this site – disguised as educated fact
Wolf is dead wrong. Remote work turned into hybrid work, which drew people back to the big cities. Most statistical data sets hides this shift by combining remote work and hybrid work counts.
Furthermore, the demand for rentals from people moving back is insane. This trend started several years ago, and gained momentum this year. Employers have the upper hand in today’s job market, and many of them are done with full remote work.
Wolf was calling for a house price drop just before prices doubled five years ago. That was the worst call ever. Wolf is still on the lookout for a 2008 style financial “deflationary” collapse that will never repeat itself in our lifetime.
For more than 10 years, I was telling everyone to load up on homes in good areas. All the Wolf followers laughed. After that home prices doubled, he banned me, and rarely lets me put a comment in anymore. He thinks my call was “dumb luck”.
For decades I was a Wall Street trader at 3 of the largest 5 firms on the street, so I have the cred.
Where heading for a world on no jobs. Ai is gonna cut jobs / clean energy is gonna cut jobs / out sourcing has already cut jobs. Eventually with a dropping population the need for new housing will drop. Maybe rebuilding from global warming disasters and movement will be about it.
Is this part of the golden age plan? With the Fed possibly cutting today and billions of housing stealing “illegals” being deported, housing should be practically free no?
I wonder how those renters, latinos and blacks that voted Trump are doing.
Fresh new antics and acts but it’s the same old circus. When’s that carnival barker going to scream “tariffs” again? It’s quite the show….
Gotta run and get more popcorn.
Trump is in Windsor palace. Luton N.W of London is 50% Muslim. England, as we know it, as an English nation, is gone. The Muslims have majority or near majority in many cities and counties. Tony Robinson, the leader of the protest: bring back my England to me. White women are rape. Qatar infiltrated the EU, the US and S. America. They own Paris Saint Germain and other sport clubs. They own major co and media. They bribed leaders all over the world, including Israel. They donate to elite colleges to influence future generations. Muslim Bros is taking over in Europe and the US. Qatar built a firewall which protect them. Their money and Al Jazeera metastasized all over the globe. They bent Macron, Merz and Starmer will. NYC will get a Muslim Bros mayor. Last week Bibi spanked them and didn’t apologize. The Brits are fighting back against a Muslim state in the UK.
Would you rather have $1 from 1 billion Muslims or $100 from 10 million Israelis?
Bonus question: Would you rather have a $400 million jumbo jet or 10 cases of olive oil?
I don’t need a yacht or a jumbo jet. 1 week Airbnb is good enough. I buy just in time. 10 cases of olive oils are too much: 95% will be old and off season. I rather get $1M and I don’t care from whom.
A more interesting story is the (cash out) refi explosion that happened last week. The financial economy is overheated. Financial conditions are already extraordinarily loose. Dumb to cut rates here.
Got Popcorn?
Got Puts?
What A Show!
Completions peaked in Aug 2024 at 1,755M. JP cut rates by 0.5% to reduce completed inventory and help to Kamala. After dropping below 1.5M units it’s up to 1.608M. Completions might rise above 1.800M bc wall street, who bought millions of single family houses at low cost and low interest rates – to “save” the RE market between 2009 and 2012 – are dumping tons of houses, and buying MF units to collect rent. Sam Zell: wall street were wrong.