Housing Starts Beat, Permits Miss; Both Crawl Along Record Bottom

Tyler Durden's picture


Following several months of permits rising even as starts flatlined, today we get the opposite, as forward looking construction came weaker than expected, with permits printing at 715K on expectations of 730K, while starts coming ahead at 717K on expectations of 685K. Completions soared as backlogs caught up with inventory started and under construction. Really, that's all one can say about these two series, who long-term charts can be seen below. What can one say but crawling at the bottom, and increasing modestly courtesy of trillions in fiscal and monetary stimulus, and as of recently full-blown mortgage debt forgiveness courtesy of this country's desperate administration to get some traction in at least one metric of economic improvement.

Long-term starts:

Long-term permits:

And Goldman's take:


  1. Housing starts rose by 2.6% (month-over-month) to an annualized rate of 717k units. Although the monthly growth rate was below consensus expectations, the level of starts was higher than expected due to upward revisions to earlier months. Single-family starts rose by 2.3% in April and multi-family starts (apartment buildings and condos) rose by 3.2%.
  2. In contrast to the modest increase in starts, building permits declined by 7.0% (month-over-month) in April. Although discouraging news, we would emphasize that the decline was entirely due to a 21% drop in multi-family permits, which followed a 32% increase in multi-family permits in March. Because multi-family permits can be quite volatile, we think the latest weakness should be partly discounted. Single-family permits rose by 1.9% during the month
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Wed, 05/16/2012 - 08:45 | 2430994 fonzannoon
fonzannoon's picture

another trillion will do it  I swear.

Wed, 05/16/2012 - 08:55 | 2431024 Killtruck
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Wed, 05/16/2012 - 09:18 | 2431101 Clueless Economist
Clueless Economist's picture

Steve Liesman, crack CNBS economist, mentioned that these numbers reflect the unseasonable weather and an "early Easter".  He says we have finally reached bottom and are heading up.

Is he a reputable source?

Wed, 05/16/2012 - 09:32 | 2431162 Max Hunter
Max Hunter's picture

The housing numbers reflect the Job situation. The only time this was not the case is when the house prices were artificially inflated due to low interest rates and lack of lending standards.  Prices will continue to fall and the over-all housing picture will continue to deteriorate until the reflection is accurate.

Wed, 05/16/2012 - 09:43 | 2431187 Freddie
Freddie's picture

Hope and Change rolls on.  Eat your peas.

Wed, 05/16/2012 - 08:49 | 2430995 GetZeeGold
GetZeeGold's picture



Low and outside.....missed it buy jiiiiiiiiist that much.


What we need is Obama's billion dolla stimulus plan......I'm like ONE billion....are you serious?


Wed, 05/16/2012 - 08:45 | 2430997 chunga
chunga's picture


I'm going Christmas shopping right now to beat the crowds.

Wed, 05/16/2012 - 09:09 | 2431062 mayhem_korner
mayhem_korner's picture



too late.  I just emptied yer WalMart  ;)

Wed, 05/16/2012 - 08:46 | 2430999 TideFighter
TideFighter's picture

Not many people building in that valley, unless their house burnt down.

Wed, 05/16/2012 - 08:51 | 2431014 Debtless
Debtless's picture

"I dunno Senator, it would be an awfully big number. And it would make you uncomfortable."

Wed, 05/16/2012 - 08:53 | 2431018 TideFighter
TideFighter's picture

There is no problem. I overheard Whoopie ask Barry what he was going to do about it. 

Wed, 05/16/2012 - 08:53 | 2431019 LetThemEatRand
LetThemEatRand's picture

Do they county FEMA camps in these figures?  If they did, the chart would look a lot better.

Wed, 05/16/2012 - 09:05 | 2431059 mayhem_korner
mayhem_korner's picture



+1 for comment & for well-articulated points yesterday (we didn't agree - and won't - but fervor and reasoning must be respected)

Wed, 05/16/2012 - 09:53 | 2431034 mayhem_korner
mayhem_korner's picture



Isn't beating the starts expectation like beating the Charlotte Bobcats?

Wed, 05/16/2012 - 09:02 | 2431036 AustrianEconomist
AustrianEconomist's picture

Check out the latest from the Capital Research Institute (CRI)

The Greek Dilemma

Wed, 05/16/2012 - 09:03 | 2431042 1eyedman
1eyedman's picture

i cringe at the msm headlines that 'sp futures climb on housing data'....when the top tick this morning was at 830am exactly and already had been climbing since 3am.....

since the banks are purposely holding back foreclosed inventory there is the appearance of tight housing supplies, when, in my neighborhood in florida (built out in 2001, prices below that level still) i can see 4 houses empty for over 2 years and almost everyhouse listed for sale is eith bank owned or shortsale.   fake prices, more mispriced assets, and ineffecient allocation of capital/resources

the market would clear and be truly on its way to health if we had market prices.   forcing people to overpay for houses is wasteful;  forcing people to overpay for dividend stocks that yld 2% and corp bonds that pay 1% is an ineffecient use of capital and bogs down a very good system...

Wed, 05/16/2012 - 09:09 | 2431064 monopoly
monopoly's picture

We have too many home builders. They need to consolidate, file for bankruptcy or just shut down. Why are we building homes when we have millions in shadow inventory? What keeps this broken clock ticking. Nothing will change till after our elections, sad but true. And I love a sale, bought more physical last week. 

Wed, 05/16/2012 - 09:10 | 2431070 Politeyx
Politeyx's picture

1979 + 19+% interest/30yr fixed = Still buying and selling.  2012 + 4% interest/30yr fixed = No buyers or sellers. What's wrong with this picture?

Wed, 05/16/2012 - 09:51 | 2431216 pepperspray
pepperspray's picture

Student loan values

Wed, 05/16/2012 - 09:54 | 2431228 LawsofPhysics
LawsofPhysics's picture

The true cost of capital creation is not being accounted for?  Imagine that, got physical?

Wed, 05/16/2012 - 09:14 | 2431089 Snakeeyes
Snakeeyes's picture

Beat me to it. I will be on Fox Business Channel at 11:40am (Dagen and Connell) and here are the charts I will show.


Will be making the point that historic low rates aren't doing much (Ben, are you listening?)

The bigger news this morning is that it looks like HARP 2.0 is kicking in for refis. But pirchase applications are DOWN.


Wed, 05/16/2012 - 09:47 | 2431201 hedgeless_horseman
hedgeless_horseman's picture



Keep preaching it, Tony.

Wed, 05/16/2012 - 09:20 | 2431106 mayhem_korner
mayhem_korner's picture



CNBC dyslexia continues.  First, the headline:

Housing Starts Surge 2.6% While Permits Show 7% Decline

Then the text:

The housing market is showing some signs of life after collapsing six years ago, but remains hobbled by a glut of unsold homes.

So...there is a glut of unsold homes and the good news is that the pace of building new ones has increased.  Is 1st grade math a prerequisite for journalism?

Wed, 05/16/2012 - 09:43 | 2431192 Vince Clortho
Vince Clortho's picture

Spot on.  If you add the former homeowners now renting, you get the equation:

Glut of Foreclosed homes + Millions of former homeowners renting = Build more homes?

Wed, 05/16/2012 - 09:57 | 2431236 LawsofPhysics
LawsofPhysics's picture

Is any math required for a journalism degree, I think not.  Same as it ever was.  Those in power pretend to make loans to their developer buddies who pretend to pay them back.  If things go south they burn the place down, rinse and repeat as necessary.  Now where have we all seen this before?

Wed, 05/16/2012 - 10:23 | 2431328 ParkAveFlasher
ParkAveFlasher's picture

The problem is that you weren't wearing your Bernanke-O-Visiontm glasses and KeyneSONICtm headsets.  Every graph is green/up, and every report is an Ode To Joy.

Wed, 05/16/2012 - 10:45 | 2431419 haskelslocal
haskelslocal's picture

You blame the journalists? We know their wings were clipped eons ago. Nothing but spin manufacturing sales shops designed to sell everything, not report it.

Wed, 05/16/2012 - 09:37 | 2431174 Vince Clortho
Vince Clortho's picture

There is only one way to solve the housing crisis.  Give the parasite bankers more free money.

Wed, 05/16/2012 - 09:38 | 2431182 KandiRaverHipster
KandiRaverHipster's picture

seriously people are building houses?  i hope they are using union shops.

Wed, 05/16/2012 - 13:38 | 2432179 GoldRulesPaperDrools
GoldRulesPaperDrools's picture

Ha ha ha!! Now THAT'S really funny!! +1

Wed, 05/16/2012 - 09:48 | 2431206 ejmoosa
ejmoosa's picture

10% of homes are said to be empty now in the US.  


So what's the average length of time from start to sell of these new homes?  It cannot be pretty.

Wed, 05/16/2012 - 09:49 | 2431214 mayhem_korner
mayhem_korner's picture



Think of it this way, you can get a 'new' GM car from a channel-stuffed lot (built in 2009) and garage it in your 'new' home (also built in 2009).

Wed, 05/16/2012 - 09:57 | 2431235 PulauHantu29
PulauHantu29's picture

Insurance rates for an empty box is very expensive. My guess is these banks go naked; i.e., no insurance. They just don't care.

I see more vacant houses, unmowed lawns, empty store fronts, etc as every week goes bye in some suburbs. Why would anyone buy now knowing prices will fall more and worse, they may be living in a slum in a few years?


The Suburban Slum Era Has Arrived










Wed, 05/16/2012 - 10:09 | 2431271 chunga
chunga's picture

The space monkeys popped the titles with the securitization swindle.

Now they need help washing them off with fresh signatures to get even a "Special Warranty Deed".

The "special" part is it does not go back any further than the last transaction. LOL.

Bank of America paying up to $30,000 for short sales

Wed, 05/16/2012 - 10:04 | 2431257 adr
adr's picture

Wow, channel stuffing by homebuilders, not to actually sell homes but to make it look like hosuing is doing better so homebuilder stocks soar. When the homebuilder stock goes up, insiders can cash out. The executives don't care about homebuilding, the effect it has on the economy, or anything else but their own personal fortune.

Channel stuffing a million $20k cars you can't sell is one thing. Channel stuffing a few million homes you can't sell with an average value of $210k is a much bigger problem.

The stock market has warped reality. Inventory only exists to generate rosy headlines to pump stocks. The devastation all of this will cause is of no concern to the insiders looking for a higher value to sell worthless pieces of paper.

Facebook is probably the ultimate insider sell. The pinnacle of the stock con. It has to be all downhill from here.

Wed, 05/16/2012 - 10:24 | 2431329 Bicycle Repairman
Bicycle Repairman's picture

The only thing worse than housing starts going down would be housing starts going up.

Wed, 05/16/2012 - 12:41 | 2431870 Cruel Aid
Cruel Aid's picture

Planned obsolence by the GDP growth machine will soon be in effect.

Time to start throwing some of these houses away. They're unsellable and therefore broken.

Viola, charts fixed, banks alive, dollar on life support but soon to be repaired by econ 101 circle jerk of revived consumption.

Wed, 05/16/2012 - 10:41 | 2431401 haskelslocal
haskelslocal's picture

Yet another report that ignores that the previous large spike was a bubble. If you admit it was a bubble, than stop suggesting that the economy will get back to it. 

How many times do we have to read that we over built? There is excess inventory. We're not getting back to historical charts unless we ReBubble... So STOP SUGGESTING IT!


Wed, 05/16/2012 - 11:01 | 2431465 spine001
spine001's picture

The problem that creates the low dividends and yields is that the monetization of the world economy has created way too much capital for the total sum of income being generated. Therefore, the problem is way too much capital and not capital use efficiency.

And by the way to try to push economic growth, in a world maker/breaker experiment, that has not passed any ethics committee, like clinical trials do (given our proven inability to predict outcomes in much simpler systems than the world economy), pundits, that stand to benifit most from it, are pushing for more monetary easing.

The end is the creation of a pretty bad attractor for the economy, where the sum of all debts will be equal to the sum of assets. That will mean a Weimar Republic time hyperinflation.

Like in any chaotic system (chaotic in mathematical terms), the attractors can be predicted but not the pathway that the system takes between its current state and the next one.

One thing we can predict, the pathway, although not known, will be extremely disruptive...

Until next time,


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