"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.