Housing Starts and Permits Rise in August but 2021 Essentially Flat

• Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,728,000. This is 6.0 percent above the revised July rate of 1,630,000 and is 13.5 percent above the August 2020 rate of 1,522,000.
• Single‐family authorizations in August were at a rate of 1,054,000; this is 0.6 percent above the revised July figure of 1,048,000.
• Authorizations of units in buildings with five units or more were at a rate of 632,000 in August.

Housing Starts 

• Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,615,000. This is 3.9 percent above the revised July estimate of 1,554,000 and is 17.4 percent above the August 2020 rate of 1,376,000.
• Single‐family housing starts in August were at a rate of 1,076,000; this is 2.8 percent below the revised July figure of 1,107,000.
• The August rate for units in buildings with five units or more was 530,000.

Housing Completions 

• Privately‐owned housing completions in August were at a seasonally adjusted annual rate of 1,330,000. This is 4.5 percent below the revised July estimate of 1,392,000, but is 9.4 percent above the August 2020 rate of 1,216,000.
• Single‐family housing completions in August were at a rate of 971,000; this is 2.8 percent above the revised July rate of 945,000.
• The August rate for units in buildings with five units or more was 356,000.

Above details from the Census Department New Residential Construction Report.

Year-over-year figures are very distorted because of Covid. It’s best to step back and just look at numbers as in the lead chart.

Here’s a closer look with a spotlight on 2021.

• 2021 Starts: Seasonally-adjusted housing starts were 1.625 million in January and 1.615 million in August. In between the bounces and dips even out.
• 2021 Permits: Seasonally-adjusted permits were 1.883 million in January and 1.728 million in August. The trend in permits has generally been lower.

Housing Shortage Illusion

On August 23, I noted The NAR Claims There’s a Chronic 5.5 Million Shortage of Houses

Why Buyers Are Aggressive

• Cheap money from the Fed
• Free stimulus money from Congress
• A booming stock market bubble makes everyone feel wealthy

Let’s not confuse a genuine shortage with an artificial shortage due to monetary stimulus by the Fed and free money stimulus from Congress coupled with a booming stock market bubble.

The shortage is an illusion.

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