Housing continues to slowly weaken slowly. The key downturn this month is in multi-family starts.
Building Permits
- Privately-owned housing units authorized by building permits in November were at a seasonally adjusted annual rate of 1,505,000.
- This is 6.1 percent above the revised October rate of 1,419,000, but is 0.2 percent below the November 2023 rate of 1,508,000.
- Single-family authorizations in November were at a rate of 972,000; this is 0.1 percent above the revised October figure of 971,000. Authorizations of units in buildings with five units or more were at a rate of 481,000 in November.
Housing Starts
- Privately-owned housing starts in November were at a seasonally adjusted annual rate of 1,289,000.
- This is 1.8 percent (±10.6 percent) below the revised October estimate of 1,312,000 and is 14.6 percent (±11.7 percent) below the November 2023 rate of 1,510,000.
- Single-family housing starts in November were at a rate of 1,011,000; this is 6.4 percent (±10.8 percent) above the revised October figure of 950,000. The November rate for units in buildings with five units or more was 264,000.
Housing Completions
- Single-family housing completions in November were at a rate of 1,038,000; this is 3.3 percent (±8.7 percent) above the revised October rate of 1,005,000.
- The November rate for units in buildings with five units or more was 544,000.
Details from the Census Bureau New Residential Construction report.
Housing Starts 1959-Present
The above chart puts a nice historical perspective on where we are. Housing starts were much higher in January of 1959.
Housing Starts Single Family vs Multi-Family
The trend on starts is negative led by multi-family.
Decline Since March 2022 Peak
- Total starts fell from 1,828 to 1,289. That’s a decline of 29.5 percent.
- Single-family fell from 1,201 to 1,011. That’s a decline of 15.8 percent.
- Multi-family fell from 627 to 278. That’s a decline of 55.7 percent.
Since May 2023, single-family starts have been steady but in a very choppy fashion, averaging about 1,000. But multi-family continues to decline.
If we are not building enough multi-family units, in the right places, good luck with bringing down the cost of rent.
I will cover that further in a second post.
Another Grim Set of US Industrial Production Numbers
In case you missed it, please note The Fed Releases Another Grim Set of US Industrial Production Numbers
Industrial production is below the January 2008 level. Manufacturing is even more abysmal.
However, retail sales were another scorcher.
For details, please see Retail Sales Explode Higher Led by Autos and Nonstore Purchases
Today is my wife’s birthday. We are going golfing (she’s a big golfer, not me). I won’t be able to timely comment of Jerome Powel nonsense later today.
A very happy birthday to her. I’ll man the ship and talk about the awful decision to cut.
Nonsense of a.50 cut, or any cut period?
Markets tank as rates soar. Good
This is the dumbest stonk market ever. Fed shouldn’t have cut at all, but they did AND signaled two more cuts next year. Yet, the stock market threw a temper tantrum. It’s like an alcoholic being told they can only have five drinks every night instead of eight. Market reaction was way overdone and I’ll bet it recovers significantly tomorrow. Santa rally and all…
We are in a bubble. I want deflation
That repricing in Bonds was not sitting well with equities, that is for sure.
Not going to play out very well as markets start to price in that Fed has no idea what they are doing.
Summary of Economic projections
https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20241218.pdf
Fed will be easing into 2025 based upon projections, but not by very much. Letting inflation slowly come down further over several years according to the charts.
Trump will be acting in a concerted manner to get economy going, as he is not going to get any help from Fed.
Horrible no good Fed cutting rates
Long rates say as much as they are spiking.
Investors funding & building multifamily apartments had better get ahead of the curved & start to pull back. Deporting 2-3 million illegals will certainly put a dent in demand for apartments.
Weakest home sales since 1995. Dreadful
Are the figures nominal or adjusted for population growth
Nominal. Even more embarrassing
Let’s hope it keeps up. Housing prices need to fall at least 20%.
I agree but these are just sales, not prices
The lower sales are starting to push down prices in many markets. Florida & parts of TX are great examples. If sales stay low long enough, it’s going to push down prices even further. How much is anyone’s guess.
Be that as it may, the massive refi’s from late 2020 through early 2022 are going to keep sales much lower than most anticipate for many more years to come. The old rule was about 7 years average turnover on a loan. I’d bet that it’s easily expected to push past 10 years going forward and probably even double.
It’s either uber low sales or a recession. Take your pick. Nothing else is going to cause housing prices to fall.
Low income apartments were not allowed to raise rents much, if at all during the pandemic. They are now making this up in spades.
Rent for a two bedroom subsidized unit near Raleigh, NC was 614. I just gave notice to tenants that rent is going to 664 next year.
That’s an 8 percent increase in a year. This is, from my understanding, NOT reported on the rent portion of the CPI which includes only standard housing.
The lowest half of income earners are really feeling pressure.
That sounds cheap as hell
“subsidized”.
Otherwise you’d be lucky to find a 2 bed unit at anything close to $1200 in Rawlay.
I’d take rats to live that cheap
Maybe Monkey Pox would let you live in his mansion. Probably in Malibu. He earns millions day trading.
That is correct. A normal two bedroom normally goes for 1300-1500.
It is cheap.
You have to make less than 30k a year to qualify for it however.
This is paid for by anyone who is a taxpayer of course.