Single-Family Housing Starts to Shows Serious Cracks On Top of Negative Revisions – Mish Talk

May 19, 2022

Let’s dive into the New Residential Construction report for April for a look at the US housing market.

Building Permits

Privately‐owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,819,000. This is 3.2 percent below the revised March rate of 1,879,000, but is 3.1 percent above the April 2021 rate of 1,765,000.
Single‐ family authorizations in April were at a rate of 1,110,000; this is 4.6 percent below the revised March figure of 1,163,000.
Authorizations of units in buildings with five units or more were at a rate of 656,000 in April.

Housing Starts

Privately‐owned housing starts in April were at a seasonally adjusted annual rate of 1,724,000. This is 0.2 percent below the revised March estimate of 1,728,000, but is 14.6 percent above the April 2021 rate of 1,505,000.
Single‐family housing starts in April were at a rate of 1,100,000; this is 7.3 percent below the revised March figure of 1,187,000.
The April rate for units in buildings with five units or more was 612,000.

Housing Completions

Privately‐owned housing completions in April were at a seasonally adjusted annual rate of 1,295,000. This is 5.1 percent below the revised March estimate of 1,365,000 and is 8.6 percent below the April 2021 rate of 1,417,000.
Single‐family housing completions in April were at a rate of 1,001,000; this is 4.9 percent below the revised March rate of 1,053,000.
The April rate for units in buildings with five units or more was 281,000.

Revisions

Unadjusted estimates of housing units authorized by building permits for January through December 2021 have been revised.
Seasonally adjusted estimates of housing units authorized by building permits have been revised back to January 2016
Seasonally adjusted estimates of housing units authorized but not started, started, under construction, and completed have been revised back to January 2017.

My charts in this post show the revisions.

Housing Starts, Permits, Completions, Since 2000

Housing data from commerce department, chart by Mish

The completion bottleneck is enormous.

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Builders are struggling getting materials and workers. Some delayed hoping material prices would fall.

Key Takeaways

A 0.2 percent decline in starts is not meaningful. The negative revisions and the 7.3 percent decline in single-family units is what matters.

The Fed is likely pleased with these numbers. Multi-family units will help with rental prices as will lagging completions.

Still, the decline does not even register on my lead chart. But with mortgage rates now well over 5 percent, the slowdown will accelerate from here.

david green bank