Housing Starts Drop For Third Month In A Row; Single-Family Permits Drop To Lowest In A Year, Rental Permits Soar

Tyler Durden's picture


If there is one main theme in the just released February housing starts and permits data, it is that while total starts continued declining, missing expectations of a 910K print, instead dropping from an upward revised 910K to 907K, the third month in a row of declines after peaking at 1,101K in November, with single-family unit starts of 583K, virtually unchanged from the 591K level first seen in September 2012, it was the epic bifurcation in Housing Permits between single-family housing and rental (or multi-family units) that is the highlight. Yes, the headline Permit number of 1,018K beat expectations of 960K rising from January's revised 945K, but it was the composition that was the story - to wit, single-family permits dropped from 599K to 588K which just happens to be the lowest number since January of 2013, but this ongoing drop in single family was more than offset by multi-family permits, which soared to 407K - the highest number since the 540K peak recorded in June of 2008!

In other words, builders and investors appear to have given up on any growth in single-family demand, made obvious by the decade-low collapse in mortgage applications, and instead everyone is betting that the last vestige of a "housing recovery" will focus merely on rental properties. We can only hope that Americans have enough disposable income to validate this thesis.

Total Housing Starts and sequential change:


Broken down by Single and Multi-Family units:


And Total Permits, seasonally adjusted and actual:


... and finally broken down by Single and Multi-family. Not the surge in rental permits.


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Tue, 03/18/2014 - 09:02 | 4562552 skwid vacuous
skwid vacuous's picture

more "multi-family" Blackstone serfs... bullish!

Tue, 03/18/2014 - 09:56 | 4562788 20834A
20834A's picture

I guess Agenda 21 is working as planned.

Tue, 03/18/2014 - 09:05 | 4562568 Element
Element's picture

Recovery Summer is coming! ... going to be a bit chilly this year ... OK, not so much a Summer, as such ... more a sort of warm feeling in your Y-fronts.

Tue, 03/18/2014 - 09:08 | 4562577 RadioactiveRant
RadioactiveRant's picture

With so many empty dwellings why build at all?

Tue, 03/18/2014 - 09:35 | 4562698 firstdivision
firstdivision's picture

For the same reason that need you to buy newer LCD tv's.  The old ones lasted too long, and people were not consuming at a rate to keep paying the 1% salaries and bonuses they wanted.

Tue, 03/18/2014 - 09:09 | 4562581 j.tennquist
j.tennquist's picture

Another Fed friendly number.

In a Fed-friendly world all that matters is the perception that the ultimate backstop is investor confidence in a short old woman whose fear is greater than her moral obligation.

Tue, 03/18/2014 - 09:08 | 4562585 Whoa Dammit
Whoa Dammit's picture

Only the hedge funds can afford to buy a house in America. And even they are no longer buying because no one can afford to rent from them.

Tue, 03/18/2014 - 09:10 | 4562592 Element
Element's picture

We haven't seen a national poverty trends survey for a while, I bet that looks pretty.

Tue, 03/18/2014 - 09:11 | 4562597 kw2012
kw2012's picture

There is a GLUT of rental units being built in Atlanta. Developers have cheap money to spend. Depreciation laws make it all worth their while. They trade these properties amongst themselves, each holding for about 3 years. Some management companies hold for much longer, but there is still a huge turnover.

Tue, 03/18/2014 - 09:28 | 4562648 highwaytoserfdom
highwaytoserfdom's picture

household income flat rents up Usury price manipulation  now the 17th richest. The real crime is allocation of capital in a non productive sector. Just the way the police state wants it stuck with high property taxes paying for substandard education at the same time straddling the best and brightest with the next bubble student loans.      Don't worry the crony capital friends of the money printers have their graft..  

Tue, 03/18/2014 - 10:55 | 4563068 FreeMktFisherMN
FreeMktFisherMN's picture

hit the nail on the head with capital misallocation. Look at how all this hot money flows into California which increasingly is insolvent and communist, whereas in Williston, ND and that whole area that is a powerhouse of production, there is a dearth of infrastructure. This is a result of inflation, which is malinvestment into unproductive sectors instead of rewarding productivity. People are numbed from the reality.

Tue, 03/18/2014 - 11:33 | 4563288 Ms No
Ms No's picture

That theory may be true, however with the Bakken it is not.  With their decline rates it's a big joke too.  It will be grapes of wrath before too long.  Although, I am sure the farmers will enjoy their 4 lane roads in the middle of nowhere.  Tight oil is the epitome of hot money flow stupidity. 

Tue, 03/18/2014 - 09:28 | 4562668 ms8172
ms8172's picture

China builds ghost cities while the US builds ghost residencies!

Tue, 03/18/2014 - 09:36 | 4562704 krispkritter
krispkritter's picture

In our defense, we do have Detroit.

Tue, 03/18/2014 - 09:39 | 4562714 Housing Analyst
Housing Analyst's picture

Get what you can get for your house today because it's going to be less tomorrow for many years to come.

Tue, 03/18/2014 - 10:47 | 4563004 Ms No
Ms No's picture

Exactly, if history is an indicator than nobody should be buying anything until you get half a block for 30 grand.  If that doesn't happen then I am going spend my money on the Thunder from Down Under and cocaine.  Everybody has to have goals.

Tue, 03/18/2014 - 12:33 | 4563691 plane jain
plane jain's picture

Have to see a big overall deflation/default for that.

With average household income around $50K ideally we should see average home sale price around $100K; a lot selling for less, and some selling for more.  2013 average sale price was about $150K.

Tue, 03/18/2014 - 09:41 | 4562724 Georgia_Boy
Georgia_Boy's picture

Ironic that more government intervention under the pretense of protecting us from the excesses of capitalism, is pushing the masses into lives like in the bad old days.  Most are on their way to economically living like sharecroppers, legally free people but not owning or having control of their living spaces, workplaces, or much of anything else. Families are breaking down under the incentives of the law, and they are socially trending towards living in a mass of nebulous common-law style relationships. Education they fund to try to be egalitarian and meritocratic instead becomes unaffordable and credentialism is increasing, gradually cementing an aristocracy most of them cannot hope to break up or join. It's becoming like living under royalty again unless you have some talent and work ethic to escape it.

(BTW - I like this blog, but only here can I find an entire post composed of three sentences, 227 words, including a 90-word first sentence. yow, come up for air!)

Tue, 03/18/2014 - 09:44 | 4562735 -.-
-.-'s picture

If you build it, they will come...


This is a select group of business entities hedging their losses for the long term, which simultaneously infers the designing of an architecture (or extending the exisiting one, however you may look at the metaphor) to perpetuate the "Truman Show" financial world (which certainly includes REITs et al.)---the same world that Mr. Jim Carrey had to discover when he fought the false waves of wicked waters only to realize the Wall.

I'm glad for two things regarding this news: (1) My seat in the audience, (2) Awareness; patience


When will the Revolving Doors cease their spinning?

Tue, 03/18/2014 - 09:48 | 4562751 Rising Sun
Rising Sun's picture

gimme my fucking food stamps Barry you fucking asshole!!!!!!!!!!!!!!!!!!

Tue, 03/18/2014 - 10:02 | 4562808 The Most Intere...
The Most Interesting Frog in the World's picture

Open the borders, fill these rental units with immigrants and taxpayers can foot the bill.  Now that is called growing the economy....

Tue, 03/18/2014 - 10:25 | 4562900 Graph
Graph's picture

30 yeaur mortgage.

Let's see....in 30 years World / US will look like...?

Tue, 03/18/2014 - 12:04 | 4563522 Offthebeach
Offthebeach's picture

Oh please!

Blue tarp over spruce strapping Obamahouses don't require permits. Considered temporary.

Bought and wrecker towed, junk motored 30 year old Winnebago parked next to garage, power, garden hose, and waste into gravel filled 55 gallon buried drum, no permit.

Mini van living and gym member showers, no permits.

Plenty of new, imaginative, out side the card board box housing that doesn't show up in fedgov stats.


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