This page has been archived and commenting is disabled.

Housing Starts Surge 15% To 872,000, Highest Since July 2008

Tyler Durden's picture





 

The pre-election barrage of "six-sigma" economic beats continues, with today the trophy going to Housing Starts, which soared by a whopping 15% from a revised 758K to 872K. The highest forecast called for a 800,000 print with consensus expecting an increase to 770,000K. Did we say 6 sigma? We meant a 9 sigma beat to consensus. The numbers being thrown about are so ridiculous they are almost credible in their political talking point ridiculousness. Expect this outlier printing to continue at least until the election. In the meantime, prepare for a barrage that housing start soared to the highest since July 2008. Looking inside the numbers, the print for single family rose to 603K from a revised 543K, while multi-family houses increased to 260K from 208K. The geographical breakdown is as follows Northeast down 4K to 75K, Midwest modestly higher to 143K from 134K, West a little more higher from 169K to 203K, and the biggest surge was in the South from 376K to 451K. At this point the best one can hope for is for a return to some normal data reporting after the election, because it is now obvious that every data series will be skewed and 'seasonally adjusted' substantially higher. Curious why BofA charge-offs are already soaring thanks to the Housing Bubble 2.0? That's why.

Housing start in context:

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Wed, 10/17/2012 - 08:54 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

THANK YOU!!!

 

Jumped the shark! I just hope Santelli calls in sick today.

Wed, 10/17/2012 - 08:56 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

Gotta say, sure looks like the Chicago Mafia and Wall Street are beating out the NWO this election!  I guess the NWO doesn't have any tricks up its sleeve.

Wed, 10/17/2012 - 08:59 | Link to Comment GFKjunior
GFKjunior's picture

Well, when you own both of the canidates you don't really have to do much.

Wed, 10/17/2012 - 09:08 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

The S&P is surging this week too, in line with the global recovery. This completely contradicts the libertarian 2012 apocalypse conspiracy theories which have been quietly forgotten on all the fringe blogs. None of the 2012 doomer conspiracy theories came true. In fact, the global recovery is only accelerating.

Wed, 10/17/2012 - 09:13 | Link to Comment duo
duo's picture

you're right MDB.  Wal-mart will have to replace 1 million 40 hour/wk employees with 1.33 million 30 hr/week employees, meaning WMT alone will reduce unemployment by 300K.  Obamacare creates jobs.

Perhaps all these multifamily units will be owned by employers so that they can be company housing for the $240/week crowd (30 hours at $8/hr)

Wed, 10/17/2012 - 09:27 | Link to Comment MiltonFriedmans...
MiltonFriedmansNightmare's picture

This just in, Walmart exempted from Obamacare taxes; detail at 6:00.

Wed, 10/17/2012 - 09:32 | Link to Comment NotApplicable
NotApplicable's picture

Typical voter: 9 Sigma? That's an energy drink, right?

Wed, 10/17/2012 - 10:16 | Link to Comment GeezerGeek
GeezerGeek's picture

Red Bull gives me wings. 9 Sigma makes me puke.

Wed, 10/17/2012 - 09:27 | Link to Comment bania
bania's picture

Wake me up when we hit 10 sigma

Wed, 10/17/2012 - 09:53 | Link to Comment saturn
saturn's picture

Is everypne sure it wasn't the China's housing report?

Wed, 10/17/2012 - 13:05 | Link to Comment hidingfromhelis
hidingfromhelis's picture

Our sigma goes to eleven.

Wed, 10/17/2012 - 09:31 | Link to Comment economics9698
economics9698's picture

Mother fucking NWA fucks up everything he touches.

Wed, 10/17/2012 - 10:22 | Link to Comment physnomics
physnomics's picture

Don't waste your time MDB~  Zerohedgers are in pessimistic side. Martket have both sides, one is optimistic, just like you,and another one is pessimistic, zerohedgers. That's why market have buy side and sell side.

Maybe all the conpiracy theories that zerohedger believe are all true, and might happen in the long run. But most of people who making lots of money don't care about those conspiracy theories, they care about when to sell and when to buy.

If you can make money, talking bullshit conspiracy theories is a little habbit and is afreedom of speech given by constitution. However if you can't, talking bullshit is wasting your time~

Wed, 10/17/2012 - 12:05 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Speaking of bullshit, was there a point to your lil tirade there Sparky?

Sun, 10/21/2012 - 00:33 | Link to Comment MeelionDollerBogus
MeelionDollerBogus's picture

I'm highly optimistic - that a short-term profit will be had from vxx shares & calls. I am also highly optimistic that holding leveraged paper silver will get some profits before total collapse, and that actual silver coins will make excellent barter when paper / electrons have no value at all.

Wed, 10/17/2012 - 11:55 | Link to Comment Ham-bone
Ham-bone's picture

I actually believe these #'s...as follows:

April '12 Fed "relaxed" rules encouraging banks to rent REO property rather than liquidate (banks can hold up to 5yrs).  Since that time...

-distressed sales have collapsed

-inventory of available properties have literally evaporated

-mortgage rates have been driven to all time lows

-3.5% FHA financing readily available

-rental rates are rising nationally

-still lots of all cash investors looking for returns

All this adds up to incent homebuilders to bring on the new construction spigots.  This is also consistent with what realtors and builders are seeing.  Fed induced bubbles everywhere.

Wed, 10/17/2012 - 13:31 | Link to Comment bank guy in Brussels
bank guy in Brussels's picture

There are apparently 18 million empty homes in the USA ... unsold, foreclosed, shadow inventory, everything else

Sure some of these empty homes are falling apart ...

But building nearly a million new homes, while 18 million homes are empty? Wow, what a system

Wed, 10/17/2012 - 14:00 | Link to Comment Kayman
Kayman's picture

Check out Random Lengths Lumber Reporter.  Framing Lumber and Panels (OSB and Plywood) are all down about 20%. CME lumber jumped solely on the Housing numbers.

Of course, no one is manipulating the numbers ? 

sarc ?

Wed, 10/17/2012 - 08:59 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Dude.....who do the think the NWO is?

Wed, 10/17/2012 - 09:53 | Link to Comment saturn
saturn's picture

The ghost cities builders..

Wed, 10/17/2012 - 10:26 | Link to Comment Abiotic Oil
Abiotic Oil's picture

Get a building permit, have the contractor drive out and turn over a shovel of dirt and that's a "start".

Wed, 10/17/2012 - 11:11 | Link to Comment seek
seek's picture

Contractor doesn't even need to do that. Just need the permit and it's a start.

Wed, 10/17/2012 - 10:39 | Link to Comment Zadok
Zadok's picture

Show me some real data, completions not starts, completed sales not promises. No skin in the game translates into manipulation to whatever end is currently most pressing.

Wed, 10/17/2012 - 11:32 | Link to Comment myptofvu
myptofvu's picture

Wow I just looked out my window and saw 22 houses going up...they weren't there before the report.

Wed, 10/17/2012 - 08:51 | Link to Comment Jlmadyson
Jlmadyson's picture

Get your multi family home right over here while demand is plummeting!

Wed, 10/17/2012 - 08:57 | Link to Comment Popo
Popo's picture

Two more weeks of beats until the election.  After that we'll get an onslaught of revisions.

Party on.

Wed, 10/17/2012 - 09:04 | Link to Comment GolfHatesMe
GolfHatesMe's picture

Parents Basements previously used for storage, now living space.  There's your six sigma.

Wed, 10/17/2012 - 08:52 | Link to Comment docj
docj's picture

Swell. So will DA FED be canceling QEInfinity with all this "better than expected" news? No?

Well, then that's about all we need to know about how credible is any and all of this "wonderful" news of "recovery". Isn't it?

Wed, 10/17/2012 - 08:59 | Link to Comment LawsofPhysics
LawsofPhysics's picture

indeed.  time to go long everything physical of any real value.

Wed, 10/17/2012 - 10:01 | Link to Comment azzhatter
azzhatter's picture

just reloaded yesterday, bought a bunch of gold and silver

Wed, 10/17/2012 - 10:41 | Link to Comment Zadok
Zadok's picture

AG bull-it's?

Wed, 10/17/2012 - 08:53 | Link to Comment viahj
viahj's picture

China has empty cities, we have empty suburbs

Wed, 10/17/2012 - 08:57 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Where did everybody go then?  To the FEMA camps?  Oh wait...

Wed, 10/17/2012 - 08:53 | Link to Comment HelluvaEngineer
HelluvaEngineer's picture

No doubt the millions of OBAMA HOUSES under construction

Wed, 10/17/2012 - 08:53 | Link to Comment LongSoupLine
LongSoupLine's picture

total steaming fucking horseshit!!

Wed, 10/17/2012 - 08:56 | Link to Comment bigwavedave
bigwavedave's picture

Need another Lithium pill.

Wed, 10/17/2012 - 09:01 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

Don't Bogey that crap....pass it around.

Wed, 10/17/2012 - 08:58 | Link to Comment PUD
PUD's picture

If this is all conspired to re-elect Obammy...who is most served by that?

Wed, 10/17/2012 - 09:05 | Link to Comment Sheeple Shepard
Sheeple Shepard's picture

Well considering Romney has already said that Benji Bernanke is getting his ass handed to him should he be elected, i see the FED'S greasy fingers all over the latest collection of American economic "data".

Wed, 10/17/2012 - 09:46 | Link to Comment MiltonFriedmans...
MiltonFriedmansNightmare's picture

To those of you better versed than I in statistical analysis, what are the odds of 3 consecutive economic reports beating expectations by 6 sigma?

Wed, 10/17/2012 - 10:30 | Link to Comment Arkadaba
Arkadaba's picture

I was wondering the same thing ...

Wed, 10/17/2012 - 10:55 | Link to Comment MiltonFriedmans...
MiltonFriedmansNightmare's picture

My understanding is that the odds of a 6 sigma event are 3/1million.

Wouldn't that put the odds of 3 consecutive beats at 9/10 to the power of 18 or roughly 1 in 10 to the power of 17? So, there is a 1 in 10 to the power of 17 chance the numbers weren't rigged.

Wed, 10/17/2012 - 08:58 | Link to Comment q99x2
q99x2's picture

If they build enough of them and the price keeps falling I might even get one. My ObamaHome. In PA there are lots of homes for dirt cheap. Utilities cost more than the mortgages.

Wed, 10/17/2012 - 08:59 | Link to Comment monopoly
monopoly's picture

It is so obvious what is going on with all these numbers that I am amazed those spewing forth this crap are not embarrassed about what they are doing. I can assure you Nevada is still in a housing depression and Sacramento reported a huge drop in sales for the month of Sept. Nothing has changed except the total bullshit that our govt. vomits up, almost on a daily basis.

 

Wed, 10/17/2012 - 09:00 | Link to Comment Sheeple Shepard
Sheeple Shepard's picture

I love the sound of bubbles being (re)inflated in the morning.

Wed, 10/17/2012 - 09:31 | Link to Comment otto skorzeny
otto skorzeny's picture

i mean seriously-I live in the SW Chicago IL burbs-the US hotbed of NO good jobs being produced thanks to the high cost of living because of the union hammerlock-and they're still building these f-ing plastic tract houses. I am guessing these scumbags are getting no-Down Pay FHA loans and everyone knows that worked out so well before.

Wed, 10/17/2012 - 09:00 | Link to Comment Winston Churchill
Winston Churchill's picture

We are all playing 'Blind mans Bluff' in a minefield of phony stats.

The only option is not to play.

Wed, 10/17/2012 - 09:01 | Link to Comment dbomb12
dbomb12's picture

Who cares!! except the Borg drones who believe this crap. In the end the FED will own all the mortgages the collapse will come then people will be renting from the government if they can afford to do even that

Wed, 10/17/2012 - 10:22 | Link to Comment GeezerGeek
GeezerGeek's picture

...if they can afford even that.

Is their any cost for living in a FEMA camp? Other than one's loss of freedom, that is?

Wed, 10/17/2012 - 11:03 | Link to Comment MiltonFriedmans...
MiltonFriedmansNightmare's picture

Renting from the Fed, not the government, but admittedly, not much of a difference between banksters and government officials.

Wed, 10/17/2012 - 09:01 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

Stopping by my bank after work topday to begin my nickel hoarding. 

Wed, 10/17/2012 - 09:32 | Link to Comment otto skorzeny
otto skorzeny's picture

I think I am going to take out a huge HE loan and see what happens when the SHTF.

Wed, 10/17/2012 - 09:04 | Link to Comment new game
new game's picture

say wtf; can anything be real? who are these buyers? are we witnessing an actual reinflation of a burst bubble-an actual first in history!  at 40b/month wash/rinse the industry free to raom again.  fraud a doin its wonderfull fulfillment. piti under inflation, buyer of first resort backing, way the fuck cheaper than rent w/ tax incentive IT COULD HAPPEN!!!!

Wed, 10/17/2012 - 09:04 | Link to Comment Dr. Engali
Dr. Engali's picture

So I assume we will see an unemployment rate just under 7% in the October jobs report.

Wed, 10/17/2012 - 09:06 | Link to Comment digitlman
digitlman's picture

more like 3%.   WE DID IT!

 

LOL!

Wed, 10/17/2012 - 10:04 | Link to Comment azzhatter
azzhatter's picture

5.3% , mission accomplished

Wed, 10/17/2012 - 09:08 | Link to Comment Payne
Payne's picture

All that is happening is builders having the guts to finish property they bought during the boom years.  There is no recovery just a desperate sprint for cash.

Wed, 10/17/2012 - 09:33 | Link to Comment Winston Churchill
Winston Churchill's picture

Bingo.

The carry cost on their land banks has got to go.

Wed, 10/17/2012 - 10:17 | Link to Comment MachoMan
MachoMan's picture

That and the realization that a large portion of the available inventory is uninhabitable and/or a laughably bad value...  The collateral for a significant amount of loans is basically worthless...  every town has a lot of them.  With cheap loans still being handed out like hotcakes in many regions (need a pulse and can qualify for FHA, et al), small homes are being built like gangbusters.  There simply isn't any point in renting nor renovating many of the existing homes...  the monthly note payment, where interest rates are, on a $100,000 house is probably what, ~$470/mo? 

There is this huge reluctance on the part of homeowners and banks alike to recognize the depreciation and deterioration of homes...  people keep trying to sell 15 year old homes (unrenovated) for the same price per square foot as new construction...  good luck with that shit.  The paradigm of perpetual appreciation is over. 

Wed, 10/17/2012 - 09:11 | Link to Comment youngman
youngman's picture

It is probably all in North Dakota....Fracking houses.....and a few frucking houses..to keep the men occupied and happy in their off times

Wed, 10/17/2012 - 10:36 | Link to Comment MilleniumJane
MilleniumJane's picture

I had a very interesting conversation with a customer yesterday who was coming off a straight month of driving truck for oil companies in Montana and Wyoming.  He said there are small "blink-and-you'll-miss-it" towns that are bringing in hundreds and hundreds of manufactured homes to rent to workers in those areas.  Do manufactured homes count as new single family dwellings? 

Wed, 10/17/2012 - 09:11 | Link to Comment dolph9
dolph9's picture

I think most here would rather have honest but dismal numbers, rather than dishonest but hopeful numbers.

And I agree.

But, unfortunately, most Americans don't.  Remember, this country is a giant Matrix of illusion.

Wed, 10/17/2012 - 09:47 | Link to Comment dwdollar
dwdollar's picture

Google "American Decline" and see what you get... A logical person might assume to find a bunch of articles documenting the facts of recent history complete with numbers and charts (i.e. many ZH-type pieces). Nope. Every one of them is a fact-less emotional tirade from a legacy media outlet hell-bent on destroying the character of anyone who dare suggest decline.

Wed, 10/17/2012 - 09:13 | Link to Comment hawk nation
hawk nation's picture

tHE ONLY BOOMIS PEOPLE LEAVING DEMOCRATIC STATES TO GO TO REPUBLICAN STATES THAT ARE FISCALLY SECURE AND NOT CORRUPT

FOR EXAMPLE ANYONE THAT CAN IS LEAVING ILLINOIS FOR INDIANA

Wed, 10/17/2012 - 09:37 | Link to Comment otto skorzeny
otto skorzeny's picture

i hate to say it but people of IL are royally f-ed. I saw a Sun-Times report that the vast majority place the blame of the public pension debacle squarely on the shoulders of the pols w/ NO blame at all on the public unions that are only out to f the taxpayer(6 figure pensions for IL State Cops/retire @ 50Y.O.???)

Wed, 10/17/2012 - 09:15 | Link to Comment EmmittFitzhume
EmmittFitzhume's picture

Adding more houses they can't sell to the existing houses they can't sell

Wed, 10/17/2012 - 09:16 | Link to Comment william shatner
william shatner's picture

http://www.leap2020.eu/GEAB-N-68-is-available-Global-systemic-crisis-Aut...

 

In six months, from the fourth quarter 2011 to the second quarter 2012, the index in fact rose 3.7%. However according to LEAP/E2020, this rise is not lasting but is, on the contrary, only an artificial pause in the inexorable fall of US real estate prices. Besides we are not alone in our thinking since the Fed itself, in spite of the recent rise in prices, considered it appropriate to give priority support to the real estate market with its QE3. Actually this rise is artificial for at least two reasons.

First, interest rates are at historically low levels (currently 3.39% for a fixed rate 30 year loan according to CNNmoney, which, on the one hand, allows some households, even largely insolvent, to return to the property market but, on the other and especially, allows investors to make good deals buying properties on the cheap repossessed by the banks. These transactions automatically increase prices. One will note all the same that interest rates have been extremely low for several years now and that the effect is only being felt now, a sign of the of the various players fragility and thus of the “recovery”. Unfortunately, interest rates at this level in no way reflects the health of the US economy and is only kept at that level thanks to the Fed’s repurchase of Treasury Bonds. In normal times, the various public plans of support for the economy should, for that matter, have had a much more marked upwards impact on real estate prices.

The second reason comes from the shortage organized by the banks which don’t want to resell houses seized at market prices to save their balance sheets. In fact, 90% of the foreclosures are retained by the banks (18). Millions of houses which will soon have to come on the market and which will lower prices; but for the moment the organized retention limits supply and creates a shortage pushing up prices.

And yet, it’s really the repossessions which reveal the real estate sector’s poor health in the United States. After a pause due to the banks’ robo signing scandal, the number of repossessions is on the rise again (we are talking of about three million repossessions a year). In fact, to understand the reality of the American property market, is a game just as cynical as it’s instructive: using the list of the largest American big cities (except New York) on Wikipedia, and counting the proportion of repossessions advertised in these cities on a website like Trulia (19), in spite of the many houses held on the banks’ balance sheets the conclusion is alarming: in the ten biggest US cities after New York, the proportion of adverts to repossessions is in the order of 56% (20), with cities like Los Angeles (the United States’ second city) or Chicago (the third) having a proportion of foreclosures of around 67%, not to mention, of course, Detroit or Miami where it culminates around 75%. One also notices that adverts where the price is falling are much more numerous than those where it is rising. Only New York seems to have a dynamic market, with almost no foreclosures and rising.

No more than in 2009, it shouldn’t be believed that the rise is lasting. It’s just another United States trick which one is now used to.

And like all tricks, once understood, they reveal a much worse reality than one imagined… opening the door to panic! Remember Lehman Brothers… in a few hours the world moved from “normal” to “Red Alert” mode!

Wed, 10/17/2012 - 10:08 | Link to Comment azzhatter
azzhatter's picture

I live in an area where there are hundreds of empty houses, hundreds. The local real estate listings are very low so apparently all these empty houses are not for sale? Who is paying the taxes as they crumble? I'm sure banks have them and refuse to release them as a quid pro quo from that fucking cocksucker Bernanke. I'm sure that fucking cocksucker treasonous prick Bernanke is behind this as he the fresh obama jizz drips off his chin. Fuck You Bernanke

Wed, 10/17/2012 - 10:30 | Link to Comment pods
pods's picture

I think you have that last visual backwards.  Right stuff, wrong chin.

pods

Wed, 10/17/2012 - 10:35 | Link to Comment MachoMan
MachoMan's picture

Banks pay them...  lienholders pay them...  typically.

From the time you quit paying property taxes to the time the property is certified to the state to the time the property is eventually auctioned is painstakingly long in most states...  I'd ballpark the average at 4.5 years.  I strongly suspect there is a backlog of unpaid taxes from more recent vintages.  This should all be verifiable through your county tax collector and/or state land commissioner or equivalent.  If they don't want to give you the information, just do an FOIA request.  It's all public information.

Often times, in the melee, lienholders forget to pay the taxes...  (hell, sometimes closing agents forget...  DOH!).  In the end, they can typically step into the homeowner's shoes and redeem the property on the eve of sale or for a statutory redemption period following sale (e.g. 60-90 days).  Just depends...  basically, you have homeowner/squatter hanging out, not paying the taxes...  it isn't until the certification to the state that the bank probably even knows about the delinquency (by then probably racking up at least 2 years of taxes).  Nice parting gift from the homeowner.   

But, make no mistake about it, there is a carrying cost for the shadow inventory...  the lienholders are on the hook if they want to keep their collateral. 

Wed, 10/17/2012 - 09:21 | Link to Comment hawk nation
hawk nation's picture

If romney wins the amount of negative economic news that will be reportedin the first 3 months will be devastating to the public

The media will blame it all on the republicans to justify their support for obama

This constant reporting of bad economic data may be when finally pushes america over the financial cliff 

Wed, 10/17/2012 - 11:31 | Link to Comment seek
seek's picture

They're on the same team. The media works for TPTB just as both candidates do.

You will never see honest, credible and accurate reporting on the financial state of the country again from the MSM, with the possible exception of the final phase of the collapse as control is lost, but my guess is by then things will be so dumbed down that no one will be left at a MSM outlet that's capable of real reporting.

Wed, 10/17/2012 - 09:25 | Link to Comment rpboxster
rpboxster's picture

Construction continues in the Research Triangle Region.  Not as much as a few years ago, but houses and apartments are still being built.  Houses are selling.  There are very few for sale signs in the surrounding neighborhoods.  When they pop up, homes sell quickly--like, a few weeks.  NC state unemployment is higher than the national avg, but in this pocket, it's much lower.  At the same time, though, I see restaurants and stores closing.  Very confusing.  Just an observation.

Wed, 10/17/2012 - 10:33 | Link to Comment MilleniumJane
MilleniumJane's picture

The company I work for has a lot of customers from your area and the DC region.  Other regions in the country it's *meh*.  We're getting some of the trickle down from all those workers who work for companies receiving massive federal grants.  Also don't forget the government workers in those areas.

Wed, 10/17/2012 - 10:34 | Link to Comment pods
pods's picture

Things have stabilized here somewhat. And with the opening of the western wake expressway, lots of stuff going up in the southern RTP area.  

Just keep it a secret, we have enough people here. :)

pods

Wed, 10/17/2012 - 09:27 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Cultivating the Emerging Market within. FoxConn hires 14 year old "interns"?

We can do better than that!

Prison labor, no unions!

Wed, 10/17/2012 - 10:02 | Link to Comment SafelyGraze
Wed, 10/17/2012 - 09:27 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

Is there any wonder why stocks go up ahead of an election?

Wed, 10/17/2012 - 09:30 | Link to Comment Roland99
Roland99's picture

About half of those starts must be in the Orlando area.

Several new developments going in around me. One will be about 1,600 homes.

 

Wed, 10/17/2012 - 09:38 | Link to Comment otto skorzeny
otto skorzeny's picture

it's truly mind-bottling-when you see the average wage/hours worked is dropping like a rock.

Wed, 10/17/2012 - 09:41 | Link to Comment vote_libertaria...
vote_libertarian_party's picture

So what was the un-seasonally adjusted number?

Wed, 10/17/2012 - 10:35 | Link to Comment pods
pods's picture

4

Wed, 10/17/2012 - 09:41 | Link to Comment bigwavedave
bigwavedave's picture

It's a known fact that Obama is a West Ham United fan. Forever blowing bubbles. 

Wed, 10/17/2012 - 09:50 | Link to Comment SafelyGraze
SafelyGraze's picture

one of the biggest oft-repeated economic myths is that "a house is the single biggest purchase a person makes"

the more typical situation is that a person "spends" most of his income on state/local/federal taxes,
spends most of what's left on rent or on mortgage,
spends most of what's left on college (for self or for kids),
spends most of what's left on a car,
spends most of what's left on insurance, and
spends most of what's left on a pension.

since the typical homeowner is less than 10 years into a mortgage, most of *that* monthly payment is interest. 

bottom line: the largest "purchase" is not a house at all.

it's either (1) that-intangible-thing-which-is-"bought"-by-paying-taxes, or (2) money "bought" by paying interest, or (3) that 6-year old car (median value $4500), or (4) furniture/appliances furnishing your apartment/underwaterHouse.

 

Wed, 10/17/2012 - 10:37 | Link to Comment inevitablecollapse
inevitablecollapse's picture

is there a comparison report that shows demand for housing?  if so many folks have either foreclosed, short sold or unloaded houses, aren't there rules against getting right back into a home?  seems to me if demand is still lagging, that these supposed 'starts' are utter bullshit either statistically being fudged or subsidies going to construction companies to build house that there are no demand for.  

Wed, 10/17/2012 - 10:58 | Link to Comment ekm
ekm's picture

Let's assume that the report is correct.

So, there is an uber super over supply of homes and what do we do, we  build new homes?

This is lunacy. It's going to crater home prices more that they have cratered so far.

 

Wed, 10/17/2012 - 11:02 | Link to Comment SheepDog-One
SheepDog-One's picture

872,000 new housing starts? Does anyone actually believe this total bullshit?

Wed, 10/17/2012 - 11:25 | Link to Comment seek
seek's picture

I haven't run the numbers myself, but if Tyler is correct in this being a 9 sigma beat, for you non-math wizards out there, this would happen by chance once in approximately 10,000 ages of the universe, assuming housing starts were reported every month since the big bang. (Yes, this is the real probability of this happening.)

These numbers are so far beyond bogus it's just utter insanity. We've attained Soviet wheat forecast levels here.

Does anyone know if the BLS warns the HFT guys to not use this as an input? This kind of tampering can have some pretty insane 2nd order effects.

Wed, 10/17/2012 - 11:56 | Link to Comment constantine
constantine's picture

Granted I sort of share the ZH author's disbelief in these numbers, when you really think about it, it is completely logical in our bizarro world of economic activity.  I live in Augusta, GA.  There are houses absolutely everywhere... but they refuse to stop building... and I mean everywhere there are new housing developments.  It's as if they think that they're going to start growing people on trees to buy them up. 

Wed, 10/17/2012 - 12:19 | Link to Comment ekm
ekm's picture

Thx for the feedback. That's what I thought.

It's going to crater the price a lot further.

 

Wed, 10/17/2012 - 21:07 | Link to Comment rjs
rjs's picture

so why is the household survey showing a year over year decline in residential contruction employment?

Sat, 10/20/2012 - 19:25 | Link to Comment rjs
rjs's picture

checking the september payroll jobs total by selected industry,  there were only 1100 more residential,  construction jobs than in august, and a decline of 13,700 home building jobs from a year ago...even worse, checking the unadjusted totals from the household jobs survey, there 301,000 less employed in construction and related areas than a year ago, with an unemployment rate remaining intolerably high at 13.2%...so there really isnt anything to cheer about here yet...

Do NOT follow this link or you will be banned from the site!