Housing Starts Unexpectedly Soar In August as Housing Permits Crash

Wild Census Report

Please consider a wild Census Department report on New Residential Construction for August.

Building Permits 

• Privately‐owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 1,517,000.
• This is 10.0 percent below the revised July rate of 1,685,000 and is 14.4 percent below the August 2021 rate of 1,772,000.
• Single‐family authorizations in August were at a rate of 899,000; this is 3.5 percent below the revised July figure of 932,000.
• Authorizations of units in buildings with five units or more were at a rate of 571,000 in August.

Housing Starts 

• Privately‐owned housing starts in August were at a seasonally adjusted annual rate of 1,575,000. This is 12.2 percent above the revised July estimate of 1,404,000, but is 0.1 percent (±9.6 percent)* below the August 2021 rate of 1,576,000.
• Single‐family housing starts in August were at a rate of 935,000; this is 3.4 percent (±10.1 percent)* above the revised July figure of 904,000.
• The August rate for units in buildings with five units or more was 621,000.

Housing Completions 

• Privately‐owned housing completions in August were at a seasonally adjusted annual rate of 1,342,000.
• This is 5.4 percent (±12.1 percent)* below the revised July estimate of 1,419,000, but is 3.1 percent (±10.5 percent)* above the August 2021 rate of 1,302,000.
• Single‐family housing completions in August were at a rate of 1,017,000; this is 0.4 percent (±12.8 percent)* above the revised July rate of 1,013,000.
• The August rate for units in buildings with five units or more was 318,000.

Confidence Level

I normally remove Census Department margin of error numbers such as “0.1 percent (±9.6 percent)” but I included them this month to highlight how much confidence the commerce department has in these numbers.

Revisions

• The Census Bureau revised July starts from 1.446 million to 1.404 million.
• That’s a modest negative revision of 2.9%.

Negative revisions have been the norm. And with homebuilder sentiment crashing, I expect more negative revisions to this data.

Still, this data is nowhere near as strong as it looks.

Housing Starts Single Family vs Multi-Family

Single Family vs Multi-Family Discussion

• Single-family starts crashed in July from 1.013 million to 0.904 million.
• That’s a decline of 10.8 percent
• For August, the single-family rebound was only 3.4 percent (±10.1 percent) above the negatively revised July figure of 904,000.

The vast majority of the August jump was multi-family. This will help rental supply but the data is quite negative for family formation.

My guess is this data will be a net subtraction to GDP estimates, even as bond yields are soaring on the allegedly strong report.

The Long Slog

NAHB National Housing Market Index Declines for the 9th Consecutive Month

Yesterday, I noted NAHB National Housing Market Index Declines for the 9th Consecutive Month

The housing crash is certainly not over.

This post originated at MishTalk.Com

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