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Homebuilder Hope Hammered As Housing Starts Tumble
With surging homebuilder sentiment, we suspect the disappointing plunge in Housing Starts (-2.8% vs +0.8% exp) will surprise a few but there is hope... as Building Permits rose 4.8% (vs 0.9% expectations) on the back of an 8% surge in multi-family / rental units. This is the highest level fo Permits since June 2008 (but still over 50% below peak permits levels in 2005). The only region with any increase in starts was the South.
Permits beat but Starts miss...
Fool me once...or twice... but three times...?
The breakdown: Permits jumped entirely due to an 8% surge in rental akak multi-family units, led by the West where there was a 22% jump in permits.

On the other hand, single-family dropped even as single-family units posted a small pick up.
The one caveat: single-family units declined in all regions except the South, where starts jumped by 10%
Finally, no matter what the permits or starts data indicates, something curious is that the level of actual housing completions for single-family houses dropped 7.4% to 585K. This was the lowest monthly print in all of 2014! It appears once started, builders - super confident as they may be - are taking their good time to complete the project.
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Foxes have dens ... you know ... the future.
Despite all the new Subprime loans. It will be interesting to see what the Credit Rating Agencies (Other than Egon Jones who have been neutered for having the temerity to downgrade US Credit) do when the Banks want to start collateralising all this new shit? Will they be allowed, agin, to issue AAA Ratings on the Highest Tranches of the new CDO's? If so, God help us all.....
ZH post from yesterday stated that sellers are saying the demand for MBSs is very high.
FEMA camps are considered muti-family, right?
Little pig, little pig, let me come in....
Z screaming up 5% no P no E
And here I was investing in duplexes. Stupid me.
This is not going to create a surge in economic growth. Most housing starts are apartments. Those are subsidized by the US Taxpayer to put all of our unemployed/under employed people (new illegal immigrants) into section 8 housing. In years past when housing was up it meant real employment and delivery of tax revenue to the treasury. This activity means greater deficits and bankster profit.
The traditional US home market is almost dead.
http://www.cnbc.com/id/101680005#.
There are a hundred reasons to 'get' a building permit that have little to do with breaking ground or building, or completing..... Including taxable reasons.
That Florida for example, you have to get a building permit before you can apply to any state or federal agency for clearance. That can take years to get done and in the mean time you have to get ANOTHER building permit because the time frames do not jive with the state or federal ones. Wonder how many duplicate permits are even counted, if at all.
Building permits mean nothing. Certificates of Occupancy do, but they are not counted. You can see buildings sit not-completed for occupancy all over the South for the last 15 years, and some even longer. Once that CO is in hand you pay taxes.
More green shoots bullshit for the algos and dum ass americans to wonder about.
Roof collapses of Buffalo homes from excessive snow load may help demand, as those homeowners move South.
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.
http://brucewilds.blogspot.com/2013/12/super-low-interest-rates-disservi...
10th time Brucie has used this one. This oldie's getting a bit moldy.
http://www.zerohedge.com/search/apachesolr_search/%22low%20interest%20rates%20at%20some%20point%20becomes%20a%20double%20edge%20sword%22
SPAM https://www.youtube.com/watch?feature=player_detailpage&v=g8huXkSaL7o#t=63
The recent call for mortgages with only 3% down is a disaster! I have been busy trying to make sense of the current economy, this is not an easy job. We are pushing on a string and calling it demand when someone who can barely pay the rent is encouraged by the government to buy a house they can neither afford or maintain. We have a shortage of "qualified" buyers and renters.
Uh, uh uh!
10th time Brucie has used this one. This oldie's getting a bit moldy.
http://www.zerohedge.com/search/apachesolr_search/%22low%20interest%20rates%20at%20some%20point%20becomes%20a%20double%20edge%20sword%22
SPAM https://www.youtube.com/watch?feature=player_detailpage&v=g8huXkSaL7o#t=63
Rents are pretty stagnant where I live. Some places are even offering 3 months free rent if you sign a 1-year lease. Yet I see houndreds if not thousands of new apartment complexes being built like crazy.
I've never seen so many apartment blocks in my life. If anyone is crazy enough to buy a house now ... might think twice if it's near these apartment complexes which are sure to deteriorate with time [and with packs of Section 8'ers].
2009 recap
S&P market cap $24T
10 yr 5%
Corp Tebt $4.8T
Let me see if I have this right:
In 2009 a couple of folks couldn't make a $10M payment on a $25B truanch MBS.
This set off an a series of events; AIG had to pay out $100B to GS, Congress authourized $750B to help with this,
and the stock market lost 50% or $12T in market cap.
Fast forward to today:
S&P market cap $47T
10 yr 2%
Corp Debt $7.3T
Increase of $6T in national debt to $18T
FED owns $4.5T in treasuries and MBS
Corporate Debt increased to ($2,500,000,000,000)
Insider sells are in the Billions, and this is the kicker, corp "profits" are doing better than ever do to massive layoffs, and wage decreases levels lower than in 2009.
The national debt owed is $200,000/worker. This is the same amount that was defaulted on in 2009!
Oh yeah, and 43 million are on food stamps. The leverage in the system is un-auditable, and everyone is depending on a nation with no natural resourses to print their version of paper money, so the farse never see's the light of day.
Now, I'm not saying anything hear that the pro's don't know. There are no surprises anymore. Infomation is real time and reactions are instant.
So my question is, how is this even mathmatically possible? Not one $10M payment on any of this debt is not being missed as in 2009? No defaults of debt anywhere in the world? And all the computer displays uptick in lock step with each newly minted YEN. Sure...
http://www.trivisonno.com/food-stamps-charts
46.5 million on food stamps.
As far as the housing situation, Lowe's profits are up 17%. That what the machine is reporting. By inference to how well Lowe's is doing, housing is on "the rebound". People are also sinking their money into "renovations".
No homes being built in Buffalo right now, except for igloos.
We need more homes like we need more economists.
Hey, watch it, buster.
Mmmm, all those mortgage backed securities.
Of course they are on building in the South ive been working in housing for 3 years now in Chicago and all the developers shutdown for the winter and thats been my experience across the entire Midwest every winter.
Sometimes it actually is the weather! Who the hell is going to build when its 0 degrees and snowing?
I trust everyone realizes that the next big housing bust is apartments. The construction of thsee is nothing short of a boom. I'm in Charlotte and they keep going up and being announced.d Was in Denver, same story. Everyone I talk to from different areas, same story.
Does anyone really believe these are going to be filled?
I wonder if my lean to that I'm building, was counted as a housing start?
As we learned from the Dems and the Keystone Pipeline, construction jobs are temporary and therefore unimportant. We will never build another bridge or tunnel because once it is done the jobs go away.
I close alot of HELOCs and Refinances right now. No one is purchasing anything newly built, but they are taking advantage of 3.75-4% rates to fix up their McMansions installing granite counter tops and updating the bathrooms. Cash deals for mobile home parks on the other hand? 1 or 2 a month. Bullish. Looks like the Goldman boys were right on that one.
Evidence of an even more sweeping housing bust is already starting to appear...
http://www.globaldeflationnews.com/evidence-of-another-even-more-sweepin...