Housing Starts, Permits Collapse In September (Spoiler Alert: It Wasn't Just The Storms)

Tyler Durden's picture

Following last month's bounce in permits (later revised lower), September expectations were for a decline of 2.1% (presumably analysts knew of the storms' potential impact when they guessed) but it utterly collapsed - down 4.5%. Worse still Housing Starts were supposed to drop just 0.4% in September but crashed 4.7%.

These are 2 to 3 standard deviation misses of expectations... so don't simply blame the storms as analysts were well aware that they occurred when they made their forecasts...

 

Notably, muiltifamily starts tumbled to 286K, lowest since Sept 2016...

And it was clearly not just the hurricanes - starts dropped in every region except The West:

  • Northeast: -9.2%
  • Midwest: -20.2%
  • South -9.3%
  • West: +15.7%

Some context...

 

But buy homebuilders...

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LawsofPhysics's picture

Building real shit like houses requires real resources like land, timber, steal, and real work...

good thing the people in banking and finance don't have to deal with such things as the FREE MONEY (ZIRP/NIRP) just keeps flowing...

"Full Faith and Credit"

Rapunzal's picture

Are we at the end of a boom ? I was surprised that permits over decades seen, never really recovered and this with the cheapest credit in human history. That is telling. The next crash will be worse.

LawsofPhysics's picture

We have never really recovered, the balance sheet depression has given way to financial repression and fascism/corporatism....

plenty of opportunity out there but not without risk, so hedge accordingly.

ejmoosa's picture

REIT profits are down 28 % year over year for the most recent quarter and 37% for the second most recent quarter.  

So I cannot say I am surprised that building more units has hit the brakes.  Haven't had two negative quarters like that since 2010.

ed31337's picture

Who wants to pay for worthless permits and get forced into building an overpriced McMansion when it's STILL going to burn down like what is happening to thousands of homes in Northern California or getting flooded out like in Texas/Florida? "Permits Protect" -- total bullshit. As if a flimsy piece of paper is going to stop Mother Nature or North Korea's nuclear bomb...

Peeps these days are either living in their parent's basement (too poor), renting (becoming poor), or building themselves a tiny house on wheels (side stepping permits).

Games Without Frontiers's picture

Dealing in real tangible things is so 20th century. Could I interest you in one of our financial "products"? How about a "synthetic" derivative? It is also pretend.

Hal n back's picture

or as rodney dangerfield said in "Back to School" some real smearign of public officials too.

buzzsaw99's picture

rule #1:  one can never build too many god damn fucking apartments.

wisehiney's picture

Jack em up janet.

spastic_colon's picture

who cares IBM is up today on fake earnings even tho its down 15% YTD........it only affects the index if it is up apparently....the VIX will also be worked and be up today; all that matters is that all of the stocks that have the biggest influence report on the same day as the fed meeting after the end of the month..............NOT a coincidence.........also, the "new" fed chair will be strategically announced around then too; must take the luster off the balance sheet phony reduction.

asteroids's picture

Take a look at Japan after their banking/real-estate fiasco in the 80's. Their "markets" never recovered in order to save their zombie banks. The US and the rest of the world is following closely behind. Disaster is inevitable. Make take time though.

idontcare's picture

At this rate, Dow 24K by Thanksgiving and 25K by Xmas. 

 

Consuelo's picture

 

 

'The West' =

 

FAANG economy.   Nothing more, nothing less.

Boiled down further, it = The 'social media' economy.

Boiled down to rue, it = What I ate last night and how it looked coming out the other end in pristine S8 OLED resolution.

The 'new economy' in other words.

 

 

surf@jm's picture

Yeah, but homebuilders take out 0% FED loans to buy back their stock, so the CEO can buy the GI joe, with the Kung Fu grip......

Thats why government pensions buy homebuilders.........