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Housing Starts, Permits Surge On Seasonal Adjustments, Rental Units

Tyler Durden's picture





 

Today's key economic data point, aside from the FOMC announcement of course, was the monthly Housing Starts and Permits report. And with November starts printing at 1091K, a massive 202K unit surge compared to the revised 889K in October, this was the highest monthly print since early 2008 and biggest monthly jump since... January 1990! Supposedly builders just can't get enough. Well, maybe. Until one again looks below the headlines, where one finds that a substantial portion of the jump is once again due to the builders' bet that rental housing demand will continue growing, as multi-family unit starts soared from 281K to 354K - just shy of the highest print since 2008 as well.

However, there was more: because if one assumes a major surge in seasonally adjusted data, there should be a matched surge in NSA data too. There wasn't, and in fact the NSA print rose by a very modest 5.5K to 82.8K actual houses started in November. Additionally, the single-family print barely rose from 49.2 to just 51.9, well below the highs seen in the summer of 2013, when unadjusted single-family starts were higher than the November print from March until August! In fact, at 51.9K, single unit homes are back to mid-2011 levels. Thank you seasonal adjustments.

But nowhere was the seasonal adjustment in today's data more evident than in the Housing Permits number. Yes, the headline number was great: it dipped modestly from an upward revised 1039K to 1007K but beat expectations of 990K handily. So what happens when one looks at the non-seasonally adjusted number? It cratered from 90.3 to 70.9K - this was the lowest print since February and the biggest absolute monthly drop in 5 years since November 2008!

Some seasonally-adjusted housing recovery.... in rental properties.

 


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Wed, 12/18/2013 - 10:13 | Link to Comment LawsofPhysics
LawsofPhysics's picture

LMFAO!  Builders go bankrupt, round two.  Good luck getting those higher rents!   We have seen this movie before.

Wed, 12/18/2013 - 10:59 | Link to Comment I am more equal...
I am more equal than others's picture

 

 

 

oversupply, must.....create......oversupply.

Oversupply - the ultimate rent control.

Wed, 12/18/2013 - 11:07 | Link to Comment Stuck on Zero
Stuck on Zero's picture

"Build it and they will come," - quote by unnamed Chinese bureaucrat.

 

Tue, 01/21/2014 - 07:40 | Link to Comment shawnmike
shawnmike's picture

Today's key economic data point, aside from the FOMC announcement of course, was the monthly Housing Starts and Permits report. And with November starts printing at 1091K, a massive 202K unit surge compared to the revised 889K in October, this was the highest monthly print since early 2008 and biggest monthly jump since... leather jackets - www.englandleather.co.uk January 1990! Supposedly builders just can't get enough. Well, maybe. Until one again looks below the headlines, where one finds that a substantial portion of the jump is once again due to the builders' bet that rental housing demand will continue growing, as multi-family unit starts soared from 281K to 354K - just shy of the highest print since 2008 as well.

Wed, 12/18/2013 - 10:17 | Link to Comment buzzsaw99
buzzsaw99's picture

they're gonna taper any day now. oh YEAH!

Wed, 12/18/2013 - 10:31 | Link to Comment SheepDog-One
SheepDog-One's picture

LMAO I don't know of anyone building anything, and I know a bunch of people in the business. 

OH and BTW on the other side I know rental management people too....here's the new trend they tell me is going on- Put up front rent, move in, then squat and don't pay a dime until evicted a few months later.

Wed, 12/18/2013 - 10:31 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Location, location, location, my friends in certain "chosen areas" are building like crazy.  Admittedly, one is a very good manager and has about 40 high dollar rentals he built in two college towns.  Rents mostly to administrators, who never seem to have a problem paying.

Wed, 12/18/2013 - 10:41 | Link to Comment SheepDog-One
SheepDog-One's picture

Luckilly all that centers around govt subsidized tuitions, for now.

Wed, 12/18/2013 - 11:00 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"all that centers around govt subsidized tuitions" -  Please SD, name one sector of the eCONomy that doesn't.

 

Wed, 12/18/2013 - 12:09 | Link to Comment SheepDog-One
SheepDog-One's picture

'Name 1 sector of the economy that doesn't'....hmmm yea that's a tough one....oh wait I got it, 'ME'!

Wed, 12/18/2013 - 11:25 | Link to Comment PrecipiceWatching
PrecipiceWatching's picture

Riding one of the biggest bubbles of all: That supporting BigEducation.

All the cities I've familiar with have discrete pockets of prosperity centered on the money pumped into the local college campuses.  Heck, some of these smaller cities would be ghost towns without government supported schools.

Wed, 12/18/2013 - 11:29 | Link to Comment LawsofPhysics
LawsofPhysics's picture

Please, name one sector of the eCONomy or industry that doesn't depend on The Fed or Government Largesse.

Foward soviet!

and hedge accordingly.

Nothing short of a very bloody revolution "fixes" anything now...

I'd love to see the U.S. follow the Icelandic model, but I don't see that happening now.

Wed, 12/18/2013 - 13:18 | Link to Comment PrecipiceWatching
PrecipiceWatching's picture

Well, of course with the QE insanity in hyperdrive, it would be easy to argue that every sector of the economy is at least PARTIALLY affected/aided.

However, very few are so completely dependent as education, which is pretty much wholly divorced from the rigor of the market.

Pull the plug on "government largesse" and the enormous education bubble, and its many peripheral beneficiaries, as we are discussing in this thread, would pop harder than any other.

Wed, 12/18/2013 - 10:40 | Link to Comment gookempucky
gookempucky's picture

5.5K to 82.8K actual houses started in November.

Says it all--seasonal mumbo jumbo always has that six digit illusion--in the next several decades we will be prfitable-AMAZON.

With ya dog---not much happening in KC--I was in the business.

Stay 360 all

Wed, 12/18/2013 - 10:43 | Link to Comment frankTHE COIN
frankTHE COIN's picture

They left out that those were TreeHouse and CardBoard Box Permits.

Wed, 12/18/2013 - 10:44 | Link to Comment White Owl
White Owl's picture

Well then... since housing is so robust and this is yet more irrefutable data behind our amazing economic recovery, then the FED can now slow down buying all those bonds and taper taper taper! /sarc/

Wed, 12/18/2013 - 10:45 | Link to Comment papaswamp
papaswamp's picture

Ton of building going on here...but not much buying. This is like a replay of 2007...just unbelievable. Fed can't taper now...it would crush the builders in a heart beat. 10yr has already creeped up over 2.88. Looks like bond bets are for some sort of taper. Wonder if builders were told no taper in the next year. A surprise would be an increase in QE level.

Wed, 12/18/2013 - 11:06 | Link to Comment Stuck on Zero
Stuck on Zero's picture

I'll bet the entire jump in housing units is for Section 8 living units.

 

Wed, 12/18/2013 - 11:10 | Link to Comment Robinhood
Robinhood's picture

Wasn't there just an adjustment to the seasonal adjustment?

Wed, 12/18/2013 - 11:09 | Link to Comment ptoemmes
ptoemmes's picture

I've seen many a "housing start" still sit unfinished.  Seems to me that picture was prevalent 5 or more years ago.

Stats boyz ought to track times to CO.

 

 

Wed, 12/18/2013 - 11:14 | Link to Comment highwaytoserfdom
highwaytoserfdom's picture

Sounds like The plan first follow Japan now match Chinese housing you might think the US had savings and debt holders like Chinese..       Empty buildings bailed out finance and usury typical of the equilivent rents crimes.  Let Blackrock go BK... 

 

Yea right Yellen SOS......    Iceland

http://disinfo.com/2012/07/iceland-jails-bankers-erases-citizens-debt-re...

Wed, 12/18/2013 - 13:23 | Link to Comment Racer
Racer's picture

2h

Goldman hikes Q4 GDP tracking forecast from 1.9% to 2.1% on housing starts data"

 

ROFLMAO

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