Housing Starts Tumble, Miss Most Since January 2007; Permits Have Biggest Two-Month Plunge Since Lehman

Tyler Durden's picture

"Epic disaster." Those two words best explain what just happened with US housing starts and permits in June.

Those who want a slightly more detailed narrative of what the Department of Commerce just reported here it is: in June housing starts were expected to print at a solid 1020K, to validate the sustainable "recovery." Instead, what happened was that the May downward revised number of 985K, which was a consensus beating 1001K last month, crashed to 893K, a drop of 92K which was the biggest since the January "polar vortex" effect, the biggest miss to permaoptimistic expectations since January 2007, and which brought the total number of starts to the lowest level since September 2013. Was it the harsh weather's fault this time too?


Biggest miss since January 2007!

The reason for the collapse: a plunge in both single and multi-family starts, so one can't blame the end of Wall Street's distressed buying frenzy for this one. In fact, single-family starts cratered to 575K - the lowest since November 2012!


But where things got really ugly was in the permits data, which plunged from 1005K to 963K, far below the expected increase to 1035K. This too was the weakest print since the polar vortex low of January when permits were a measly 939K.

And unlike Starts, here one can blame Wall Street for giving up on the multi-family sector: the so-called "built to rent" permits plunged from 363K to 301K. Considering the April number was 436K, this was the biggest two month drop since, well, Lehman.

Yup: weather.

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youngman's picture

But the NAHB were so positive yesterday...nothing but blue sky for them....

ejmoosa's picture

Time to start drug testing those polled before we see how they are feeling.....

GetZeeGold's picture



Stock market is up....just sayin.


I think the FED should start buying houses as well.....just sayin.

Poundsand's picture

They are.  Who do you think is wicking up all that MBS?

Smegley Wanxalot's picture

Fuckin June weather.  I bet it was unexpectedly warm ... almost like summer.

NoDebt's picture

Agreed.  This porridge is too hot, that porridge is too cold, and we'll never get to the porridge that's "just right".


NOTaREALmerican's picture

Looks fine to me.    How many houses can the top 20% buy?   Who cares about the Trash Class economy?    They are happy living in apartments.   

BurningFuld's picture

Or deserted industrial complexes. There is lots and lots of shelter for everyone.

NOTaREALmerican's picture

Bah,  we've got the most compassionate top 10% in the history of the world.   Only the mentally ill are living on the streets.   The worthless members of society have all the (near) food and entertainment they can handle.  And,  they prove this everyday by quietly living their worthless but happy lives with other members of the Trash Class.   We've truly got the most functional society on the planet and EVERYBODY knows it.

GetZeeGold's picture



most compassionate top 10% in the history of the world


The black population of Houston is gonna rise up if we let too many more illegal aliens from South America in. Our compassion is costing them jobs.

NOTaREALmerican's picture

We'll just send the White Trash after them.   When has THAT not worked.   "Those people" are rising up.    HA.   Any top 10% child could figure that one out.

steveharless's picture

Think of all the free housing the government can give to the illegal immigrants....and just think; we will gladly* pay taxes for them   (*SARCASM FONT)

Hubbs's picture

Ahem. I happen to be a surgeon earning mid 6's, late 50s with a 10 yr old daughter and I won't buy a house, not while I am unable to sell the house I left in eastern NC, and even if I could, will not. Why? Because there is no job security anymore except for those who are already at the bottom and working minimmum wage jobs.

My job is at the mercy of big corporate hospital /HMO CEOs, most of whom are idiots,,and have less training and qualification than I in our respective fields.

The medical profession has given away our profession and livelyhood just like the politicians have given away our country.

So, to the realtors out there, get ready. The last of the dumb money (the doctors -or at least I for one) are starting to rethink the whole homeownership idea. I will rent until my daughter is out of the house (if she will  ever be able to afford to do so) or I am ready to retire , if I can ever do that.


steveharless's picture

who cares,,,the immigrants are going to take your place in the market and for the first time, they will have a chance to own a home in the usa,  get ready for the market explosion

ImReady's picture

Get ready for an explosion in medical H1B's!

MachoMan's picture

Leave it to a doctor to draft a complaint and not be able to leave out bragging about himself...  You definitely sound like you're between a rock and a hard place...

RaceToTheBottom's picture

The timing of drug liberalization laws is telling.


madbraz's picture

Muh like any other economic data point released by our masters, the lie of the previous months numbers were so big that they have to catch up (down) in order to be able to pull the same trick in the coming months.  The greatest example of this was the fraud GDP number of Q4 2013.

Omen IV's picture

increasingly i find myself questioning the validity of the data, potential bias method of collection and whatever the algorithm or calculation used to compile the data - where did they play a game this time?

The stated unemployment rate is so out of wack as is the inflation rate - you tend not to believe anything anymore

"The Obama Lies" are becoming the standard term for ALL information on receipt until proven!

John Law Lives's picture

"...crashed to 893K, a drop of 92K which was the biggest since the January "polar vortex" effect..."

This is actually bullish.  First, the bar has been drastically lowered going forward, so it will be easier to beat this number in the July data.  That is reason enough to buy stawks now.  And, should July show an improvement over this low number, that will be clear evidence that the housing market recovery has reached escape velocity, so that is more reason to buy stawks.  And, since stawks should be bought now and when the July data is published, that is even more bullish... because stawks should be bought in anticipation of the August data... which should clearly be bullish even if the August data stinks...


Aknownymouse's picture

It is because of summer. Also Lavorgna said it does not count because it is all in the south. You know . Mexico or something.

Took Red Pill's picture

not surprised. The middle class and young people have no money to build a home.

NOTaREALmerican's picture

Just the losers who don't want to compete.    The most-fit members of society aren't going to GIVE AWAY houses.    In a survival-of-the-fittest society you've got to PROVE you are worthy of success and that comes by competing with the existing winners.   Life isn't fair, but most people understand this. 

Space Animatoltipap's picture

"Surival of the fittest" means the jungle. That's oke but don't start whining when you meet some degraded jungle activity that you really don't like. 

TabakLover's picture

Yeah like when someone bigger, stronger and meaner than you comes to your house, beats you up, and takes your shit.

Where did you say you lived?

NOTaREALmerican's picture

The top 10% have always lived in areas away from the Trash Class.    The Trash Class always take shit from other members of the Trash Class.  It has always been so.   

The most-fit members of society own the government and the corporations: they are the management class that keeps the loot transfering from the bottom to top.  The top 20% participate in the various scams.  It's just how life works:  the smartest-n-savviest screw the dumb-n-clueless and create bullshit for the dumb-n-clueless about how other dumb-n-clueless people are actually taking their shit.   It NEVER fails to work.  

Space Animatoltipap's picture

It actually does fail to work. But with selective memory you try to hide this awkward reality. It will come anyway. Besides, you also will have to die after some time. Really, "invincible one". Childish people don't realise this being occupied with childish nonsense. 

Took Red Pill's picture

@NOTaREALmerican-I don't agree. There are a lot of educated, hard working people out there who just can't make it. The "American dream" is out of reach for many and is much harder to achieve then it used to be.

all-priced-in's picture

Need to find a way to allow people with no job to buy a house -

Maybe a "get out of your parents basement" tax credit - 



Why not just offer INTEREST ONLY 30 year 0 % INTEREST RATE mortgages with no money down.



Devils Advocate's picture

 Every year the 0% interest period gets longer, first it started at 12 months than 24, now i see it for 6 years for cars and furniture.  Can't wait for it to be 10 in a few years!!

corporatewhore's picture

nothing is free.  it's built into the price.  just a marketing gimmick to fool ignorant trash

CheapBastard's picture

I’m holding out for the 100-year, 0 interest, zero payment mortgage with an automatic Revised HARPP refinancing plan on the 100th year.

KidHorn's picture

Me too but it also has to be a negative amortization loan. They have to pay me each month to live there.

TabakLover's picture

or at least .25%.........like Jamie Dimon and Lloyd Blankfien get.

MATA HAIRY's picture

and as soon as that bad housing news came out, the stock futures jumped up. 

BiteMeBO's picture

This can easily be spun into "housing market is now ready to take-off".   There, all set.  Forward sheeple.  

CheapBastard's picture

Rumor has it, "there's alot of money sitting on the sidelines."


Yuk, yuk, yuk......

oklaboy's picture

can't wait for NAR to save the day 

stutes33's picture

Epic disaster? No, an epic disaster would be a giagantic meteor flying into the earth.  Take it easy CNBC, I mean ZH....

GetZeeGold's picture



Oh....you mean like Obamacare. Did you sign up to be hacked too?

roadhazard's picture

Don't worry the repubicans are coming up with a better plan. The NDAACA.

Last of the Middle Class's picture

If you listen closely you can hear "that giant sucking sound" as the standard of living slides down the drain for millions due to unrestrained QE. Everyone knew this would happen, it's not rocket science, it's a mathematical fact and now we're stuck years later with the same problems we started with before QE, TARP, TBTF, just everyone's standard of living is lower. Let's hear it for the kleptocracy!!

NOTaREALmerican's picture

NOT everybody.   The most-fit members of society, the top 10%, are doing better than ANY TIME in history.   The Trash Class, overall, knows their kids will have an opportunity to compete to get into the top 10%.    But, not everybody can make it and the worthless losers accept their lives and the most-fit-members support them by creating jobs or giving them welfare.   The system is working perfectly.   MOST people are happy with the system.  

Crawdaddy's picture

Going with the sarc thing or just hitting the ganja with the morning coffee?

LuckoftheIrish's picture

"Ganja is too kind; more like reading The Hunger Games and REALLY identifying with the Capital.

NoDebt's picture

You forgot to put the MDB attribution at the end.  

khakuda's picture

It's what happens when your goal is to push up the prices of everything at unsustainably high rates at a time when wage and job growth lags and debt is already as cheap as can be.

AdvancingTime's picture

When it comes to real estate low interest rates at some point becomes a double edge sword, that effects both the value by making it easier to purchase thus driving up prices, and at the same time allowing more building to take place and increasing the supply. Often we reach or exceed demand, this eventually has a dampening effect on rents and people stop buying it as an "investment".

Prices must rise and real estate appreciate more then the natural depreciation from the wear and tear from age or the main driver for owning it vanishes. Oversupply is the bane of real estate and crushes the value of this hard and expensive to maintain commodity. Currently we are in uncharted waters, more on this subject in the article below.


miker's picture

The great apartment boom is nearing an end.  Fueled by free Fed money through Fannine, developers have shit all over themselves to put these things up.  Moral hazard is a thing of the past.  They know that when the economy tanks again, the Fed will buy up their properties.  Probably turn them over to FHA and make them into slum housing.

The number of apartements that have been built in Charlotte and other cities I have visited, boggles the mind. 

Colonel Walter E Kurtz's picture

Miker they are still building the shit out of them in my Midwestern town. There is a shortage of drywall hangers right now with all these units going on. And more apartments are coming and out for bid.

For the most part, we are dominated with medical office buildings and apartments. These medical office buildings are just being thrown up by these national conglomerates in preparation of putting out of business your local independent doctors. Assimilate or be killed!