Mortgage News Daily reports Housing Permits Soften, Starts Plummet.
All three measures of residential construction activity performed poorly in June, and the two most closely watched numbers, construction permits and housing starts, fell short of their June 2017 numbers.
Starts
- The worst numbers were for privately authorized housing starts. They failed to hold on to their gain in May, dropping 12.3 percent to 1,173,000 units. May’s estimate of 1,337,000 units was revised down from the original 1,350,000. The June estimate fell below the June 2017 pace by 4.2 percent.
- The results didn’t come close to meeting expectations. Analysts polled by Econoday had projected some softening from the May number, a 5.0 percent month-over-month increase as originally reported. Still they were looking for starts in the range of 1,285,000 to 1,350,000 units. Their consensus was 1,320,000.
- Single-family starts were down 9.1 percent from May and off 0.2 percent from the June 2017 number. The June estimate was 858,000 units compared to 944,000 in May, the latter an upward revision from 936,000. Multifamily starts dropped by 20.2 percent to a rate of 304,000 units, 15.3 percent lower than the same period in 2017.
The results didn’t come close to meeting expectations. Analysts polled by Econoday had projected some softening from the May number, a 5.0 percent month-over-month increase as originally reported. Still they were looking for starts in the range of 1,285,000 to 1,350,000 units. Their consensus was 1,320,000.
Permits
- Construction permits were authorized in June at a seasonally adjusted annual rate of 1,273,000, down 2.2 percent from the May rate of 1,301,000. This is 3.0 percent lower than the permitting pace in June 2017.
- Analysts were expecting permits to increase from May, looking for results over a range of 1,300,000 to 1,360,000. Their consensus was 1,328,000 units.
- Single family authorizations were up, rising 0.8 percent to an annually adjusted 850,000 units compared to 843,000 (revised from 844,000) in May and were 4.6 percent above the year-earlier rate. Multi-family permits fell by 8.7 percent to 387,000 and are 16.2 percent behind the June 2017 pace.
Completions
- Housing completions held their ground, remaining at a rate of 1,261,000 units. The previous May estimate was revised down to that number from 1,291,000. Completions in June were 2.2 percent higher than a year earlier. Single-family completions were estimated at a rate of 862,000, down 2.3 percent for the month but ahead of last year by 5.3 percent. Multifamily completions rose 7.1 percent to 393,000 but are 2.7 percent lower than the prior June.
- Completions in June numbered 113,500 on an unadjusted basis compared to 105,800 in May. There were 75,800 single family completions compared to 74,400 a month earlier. Completions in 2018 through June are 8.3 percent higher than the same period in 2017, 581,600 versus 537,000, and those for single-family units are up 8.4 percent.
- At the end of the reporting period there were 1,121,000 homes nationwide in some phase of construction. Single-family units accounted for 515,000 of those underway. There were also 160,000 permits that had been issued but for which construction had not yet begun.
The Census Bureau’s New Residential Construction report has more details.
Starts by Region
- US: Down 12.3%
- Northeast: Down 6.8%
- Midwest: Down 35.8%
- South: Down 9.1%
- West: Down 3.0%
Wow. Revisions coming?
Mike “Mish” Shedlock
The Fed painted itself into this corner years ago when it normalized Quantitative Easing… there’s no escape w/o destroying the $USD and/or the domestic economy – the Fed knew this going in, but decided that their personal golden-parachutes are more important that the future of the republic. Now it’s just musical chairs among failing fiat interests, dreading the moment when the music stops.
But Powell says we need higher rates for a stronger economy. Good luck with that.
Maybe Ross shouldn’t apply tariffs – especially if he holds stock in companies that would benefit from tariffs. How did that work out for Boeing to stop Bombardier airplanes?
You sure about that? He’s usually a loose cannon, no telling what he’ll say!
All kidding aside, if I were Yun I’d pre-record myself muttering a few blurbs:
And so on. Record these for a few days, then spend the other 51 weeks a year on a hammock in the Bahamas. NAR chief isn’t a job, it’s a sinecure. One of the easiest gigs ever.
Historically it is a pretty noisy series. The recent contrast in numbers may not mean much.
Used RV sales are booming.
I can understand the South declining over the last few months due to hurricane replaced homes having starts die off, but WTF happened in the midwest? 160->243->156?
When interest rates start to rise, buyers rush to buy while they can still afford it, before the payments get out of reach. Now that rush is over, and we wait. In time the payments will come back into reach, or houses won’t sell. There are only three ways for payments to become affordable again. Wage increases, interest rate declines, or falling home prices. The latter is what usually happens.
Midwest data point screaming for an explanation. Was it really a regional phenomenon, or did something blow up in one or two of the urban areas in that region?
Wise words from Too Short:
In the ghetto
You think life is hard
Food stamps and to’ up cars
Wall to wall dirty orange carpet
Sit in a bucket hopin’ you can start it
And ride around to the liquor store
Can’t get a job get drunk some more
You better stop trippin’ on them stereotypes
Cause in the ghetto there’s a good life
We ain’t starvin’ like Marvin and won’t see no roach
When ya chill wit the rich folks in the hood
Ya sittin’ on leather watchin’ big screens
Bought by the dope fiends
Smokin’, and what about the brother wit the good jobs
Save money and workin’ hard
Bought a house for his wife and kids
Ya only got one life to live
I know a brother that got some cocaine
Ya know his face but don’t know his name
Ya know he got the sack man
And he’s sittin’ on a phat bank
Sellin’ cars at his house in the driveway
Benz so clean don’t roll it just fly away
Cause folks got money in the ghetto
Yea you know
Hey hey hey
What cha got to say
(It’s money in the ghetto)
Hollywood
Havin’ money in the ghetto
Money in the ghetto ain’t nothin’ new
It’s been like that way before you
Was even born; get up from the down stroke
Chocolate City for the black folks
Say it loud in ya hot pants
Man child in the promise land
I take ya back to iceberg Slim
And all the players that came before him
If you a everyday hustler, get cha money
Cause what they do to black man ain’t funny
All the time tryin’ to put us the pen
You get parole and then they send ya again
All the homies in the hood gettin’ paid
You might have left but the money stayed
In the ghetto it ain’t all bout drugs
Gettin’ paid doin’ all kinds of stuff
Only rule on the street is don’t get caught
Unless ya hustle ain’t breakin’ the law
And even though rich folks got it good
We’re sittin’ on it phat in the hood
I’m ridin’ them gold ones
Smokin’ dank and it’s potent
Ask them fools cause they know
It’s money in the ghetto
Hey hey hey
What cha got to say
(It’s money in the ghetto)
Hollywood
Havin’ money in the ghetto
I got money baby just tell me the price
Cause Short Dawg ain’t nothin’ nice
I always hit the town wit my boy Ben Franklin
Spend fo get an ounce a dank then
Rich nigga get high relaxin’
And if I bust a Ben Franklin and get some Andrew Jackson’s
Five twenties for a hundred dollar bill
You know the math lets make deal
On a one dollar bill if ya look on the front
Ya find the face of George Washington
Make money baby that’s all I do
That’s how I know Thomas Jefferson is on the two
Abraham Lincoln got shot and died
Freed the slaves so they put him on the five
And Andrew Jackson, my old time friend,
They put his face on the front of the ten
They are the dead presidents
From the hood and they represent
The american dream for the average minority
Make some money get some weed and a forty
I’m on the east side livin’ like a king
Kick back watch a fifty inch screens
Bounce to the west and hit studio
And spend my money in the ghetto
Nowadays if you can’t say a rap, or play sports
You might just come up short
And they always say the same things
Don’t be a gangster or a dopefiend
Get your high school diploma, go to college
Get a degree and start makin’ dollars
Only one thing wrong, and it’s a Trip
Inner city schools don’t teach us shit
Got us stuck on stupid, Straight S.O.S
Can’t get nothin, but they payin the rest
Of them fools
All Around the world in the other countries
They should be spendin that money right here
In the state of California
You graduate and can’t spell “diploma”
Dip to the hood and get rich
Slangin rocks to a smoked-out bitch
No school’ll come close to that
A few transaction make my pockets fat
I make a lot of money and it ain’t no lie
I’ll probably ball ’til the day I die
And if I didn’t, so what?
I bet you I’d still come up
Cause there’s a whole lot of money in the ghetto.. yeah you know
NAR head economist, Lawrence Yun, will spew his usual pablum…..”transitory”