The New Residential Construction Report for July shows another bad month for housing.
Building Permits
- Privately‐owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,635,000. This is 2.6 percent above the revised June rate of 1,594,000 and is 6.0 percent above the July 2020 rate of 1,542,000.
- Single‐family authorizations in July were at a rate of 1,048,000; this is 1.7 percent below the revised June figure of 1,066,000.
- Authorizations of units in buildings with five units or more were at a rate of 532,000 in July.
Housing Starts
- Privately‐owned housing starts in July were at a seasonally adjusted annual rate of 1,534,000. This is 7.0 percent below the revised June estimate of 1,650,000, but is 2.5 percent above the July 2020 rate of 1,497,000.
- Single‐family housing starts in July were at a rate of 1,111,000; this is 4.5 percent below the revised June figure of 1,163,000.
- The July rate for units in buildings with five units or more was 412,000.
Housing Completions
- Privately‐owned housing completions in July were at a seasonally adjusted annual rate of 1,391,000. This is 5.6 percent (above the revised June estimate of 1,317,000 and is 3.8 percent above the July 2020 rate of 1,340,000.
- Single‐family housing completions in July were at a rate of 954,000; this is 3.6 percent above the revised June rate of 921,000.
- The July rate for units in buildings with five units or more was 426,000.
Seasonal Adjustments
Seasonally-adjusted Census Bureau reporting by percentages dramatically distorts what’s really going on.
The month-to-month seasonal adjustments are huge, Covid and the rebound remains a big factor and weather enters into play.
Unadjusted there were 139,600 starts, which seasonally-adjusted and annualized translated to 1,534,000 starts
Starts vs Pre-Pandemic Level
Longer-term the lead chart provides a better frame of reference for the pandemic.
Housing starts were at a seasonally-adjusted annualized rate of 1,589,000 in February of 2020. In July of 2021, starts are below that level and are now at a rate of 1,534,000.
Long-Term Perspective
There was a very strong rebound from the housing bubble bust, a huge covid decline, then an even bigger covid rebound.
After all that, it looks as if we are close to the long-term average. A quick check shows the SAAR average since January 1959 is 1,430,000.
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Mish
Soon we will see these people who decided it was a good idea to participate in this market walk away so far underwater.
The silly thing is the Tea Party side that claims they are taxed enough already didn’t seem to understand in the end these tariffs would be passed off to the consumer.