Housing Starts Edge Slightly Higher As Completions Drag Along Historic Bottom

Tyler Durden's picture


Housing starts, permits, units under construction and completions all continue to crawl slowly along the bottom. The noise was as follows: June starts came in at 760K on expectations of a 745K print, up from a revised 711K in May; Permits were 755K on expectations of 765K, and down from a revised 784K. In other words, largely a wash. Within start, single unit housing has barely budged upward, with the only strength focused on multi-family units on hopes that the rental market will pick up. Of course, by building much more rental units, the only thing that will happen is a flood of supply on the margin which sends rents lower yet again. Finally, keep in mind that both starts and permits only indicate one aspect of the lifecycle of new homes: the final one, and the one that few speak about, completions, came at 622K: as the second chart below shows, there is absolutely no rebound in this category which actually shows what is coming to market.

Housing Starts for single unit and 5+ unit housing:

And, as usual, some long-term perspective:

As for where starts end up: Housing Completions, the picture is not that hot.

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Wed, 07/18/2012 - 08:52 | 2627540 Thomas
Thomas's picture

Housing recovery is one minor malaise away from becoming a bad joke. The guys who try to sell this notion have an agenda (or no brain). BTW-A recession shouldn't be defined so restrictively as a contraction in the economy. Generally sucking ought to count and it is generally sucking beyond a shadow of a doubt. And another pet peeve: declaration of a recession shouldn't be so belated that it is necessarily past tense. That is definitely by design. "Oh that was sooooo yesterday."

Wed, 07/18/2012 - 21:54 | 2630482 eatthebanksters
eatthebanksters's picture

I would like to see the breakdownof the starts....where they are happening and who is building.  My guess is that the big publicly traded builders are going (senior execs have to justify those bonuses) and smaller private builders are starting home in pockets of economic strength.  (The SF Bay Area is nuts...no recession here!)

Wed, 07/18/2012 - 08:49 | 2627541 battle axe
battle axe's picture

Yah, the housing crisis is over!!!!! sarc

Wed, 07/18/2012 - 09:25 | 2627673 YC2
YC2's picture

The weird thing is they try to spin more supply as bullish for prices.  If they are anything, these lower competions and starts are good for the market.  If you told me these numbers were going to zero tomorrow for the next two years, I would be much more inclined to buy.

Wed, 07/18/2012 - 08:52 | 2627552 101 years and c...
101 years and counting's picture

We need lower rates.  Once we get the 30 yr mortgage at 1.0%, housing can recover.  sigh

Wed, 07/18/2012 - 08:54 | 2627562 Thomas
Thomas's picture

This chapter in history will be called something like, "The Age of Dumb Asses"

Wed, 07/18/2012 - 08:58 | 2627579 GMadScientist
GMadScientist's picture

For how long?

Wed, 07/18/2012 - 08:53 | 2627557 ZippyBananaPants
ZippyBananaPants's picture

What happened to Larry Kudlow's face, looks like an ompa loompa

Wed, 07/18/2012 - 08:55 | 2627567 battle axe
battle axe's picture

He is back doing Coke  and Hookers like back in the day when he was at Bear Sterns......The guy is a douche bag. 

Wed, 07/18/2012 - 09:00 | 2627589 GMadScientist
GMadScientist's picture

When the pickled excuse for a liver is on its last legs, the bullshit eventually builds up and is expressed through the pores.

Couldn't happen to a dumber asshole.

Wed, 07/18/2012 - 09:11 | 2627629 Village Smithy
Village Smithy's picture

That stupid pr--- must have asked 3 times last night who are the victims of the LIBOR scandal? When one of the sheeple's favourite comedy/business clowns is getting away with that kind of commentary it makes you realize just how deep we are in.

Wed, 07/18/2012 - 08:53 | 2627559 Lucius Corneliu...
Lucius Cornelius Sulla's picture

Wouldn't it be nice if we quit caring about housing starts but rather had an economy driven by producing things for export?  The problem is that housing and the FIRE industry that supports it continue to dominate.

Wed, 07/18/2012 - 08:55 | 2627571 Thomas
Thomas's picture

You're missing the point: We should never ever let the consumer get out of debt. Au contraire, it is their civic duty to take one for Gipper--spend on a suicide mission. We are, of course, a consumer driven economy. I think I'll go grab a souvlaki.

Wed, 07/18/2012 - 08:53 | 2627560 Deep79
Deep79's picture

I thought housing bottomed in 2008?

Wed, 07/18/2012 - 08:54 | 2627566 GMadScientist
GMadScientist's picture

You see that bottom next to your hand? Not that one.

Wed, 07/18/2012 - 08:56 | 2627573 Thomas
Thomas's picture

The housing market couldn't find a bottom on a porn site.

Wed, 07/18/2012 - 08:54 | 2627563 GMadScientist
GMadScientist's picture

And they said the Fed Reserve is only for the benefit of people with slave-owning grandparents.

The Bernank is doing something about the rent being "too damn high"!

Wed, 07/18/2012 - 08:59 | 2627582 caimen garou
caimen garou's picture

what a joke,building permits were up in a town near my home where they make you buy a building permit to build a utility shed,dog house,or a play house for the kids! glad I live in the country.

Wed, 07/18/2012 - 09:01 | 2627598 GMadScientist
GMadScientist's picture

Our assessors are on their way.

Wed, 07/18/2012 - 09:09 | 2627620 adr
adr's picture

Same thing in my town. Hmmm, they wouldn't be cherry picking stats to make it look like housing is doing better for the benefit of the stock market would they? No, they would never do that.

Wed, 07/18/2012 - 09:30 | 2627703 caimen garou
caimen garou's picture

no they would'nt do that, just like they would'nt do that with the job numbers or inflation or anything the gov reports on.......FUBAR

Wed, 07/18/2012 - 11:46 | 2628296 Mark123
Mark123's picture

I love how these days all of these ever-so-critical stats are just accepted at face value.  How about they give us the data dump and subject to statistical audit.


My guess is that if you did a statistical sample of about 25 samples you would find that there are indeed a lot of bogus transactions (such as your permit for a garden shed).


Of course....the sheeple should not be given the raw data - they might get scared and do something stupid like turn on their masters!

Wed, 07/18/2012 - 08:59 | 2627585 ebworthen
ebworthen's picture

"Long term perspective" chart.

Dangerous material for the green shoots and mustard seeds crowd.

BTW - what will the new terms be for the next "recovery" that isn't a recovery?

Wed, 07/18/2012 - 08:59 | 2627586 rwe2late
rwe2late's picture

 Do prisons, homeless shelters, and FEMA camps count as multi-dwelling units?

 And do double-wides count as single dwelling units?

Wed, 07/18/2012 - 09:10 | 2627624 GMadScientist
GMadScientist's picture

Unrealistic maybe, but there's somethin I gots to do,
I need:

A big ass bus with a satellite dish,
a double-decker double wide, What I wish,
I dream open-eyed, that this be true

It's gonna have two ice makers, in both refrigerators,
a silent but violent generator,
to run the subwoofers and the disco ball,
and the escalator up to the dance hall,

On the second floor with a giant skylight,
A drivin range and jacuzzi just right,
for skinny dippin right after the show,
At 80 miles an hour,
it's worth all the dough

Until then,
I'll stand on the corner with a sign,
that says, "I will work for my
Double Decker Double Wide"

Wed, 07/18/2012 - 09:01 | 2627594 monopoly
monopoly's picture

You have to wonder what the housing numbers would be like if we went back to the "old rules" that worked for over 40 years. Like you need a full time  job and stated, verifiable income. You needed a minimum of 20% down and have other assets. The maximum mortgage would not exceed 28% of your annual income and their is 0 govt. backstop. In other words, the bank takes all the responsibility. 

I wonder!

Wed, 07/18/2012 - 09:16 | 2627641 GMadScientist
GMadScientist's picture

They'd be the same, except there would be a much smaller number of owners, most of whom do not actually live in the houses, but rent them to people who can't afford a mortgage. Also, the depression would've happened in 1992 instead of 2008 and been blamed on Bush I instead of Shrubya the Daft.

Please don't forget that there was plenty of private label securitization going on when you step onto your high-horsie.

Wed, 07/18/2012 - 09:18 | 2627647 adr
adr's picture

Either there would be no sales, or home prices would be a hell of a lot lower. How long would it take someone making $35k a year to save up $40k to put down on a $200k home in the current economy?

More than their lifetime is probably the correct answer.

Wed, 07/18/2012 - 09:22 | 2627666 GMadScientist
GMadScientist's picture

$35k/year in this economy basically means you're renting for life, and probably not in a nice nabe.

One really needs to drop the "home ownership" thesis and fess up to the "American dream" being a logical and mathematical impossibility for the vast majority of Americans.

Wed, 07/18/2012 - 10:10 | 2627840 GCT
GCT's picture

Well now the prices have to adjust to the new standard of minimum wage so housing has alot further to drop.  You can still buy a 1200 Sq. Ft. home here for 80 to 100 k.  200,000 buys you a home here with 3000 sq. ft. 


Wed, 07/18/2012 - 10:31 | 2627937 blunderdog
blunderdog's picture

We need dormitories.  Like in China.

The only way our workers could ever be competitive is if we could drop wages to a few thousand a year.  Since most folks spend a lot on rent/mortgage, the obvious solution is to make that cheaper.

Wed, 07/18/2012 - 11:48 | 2628308 Mark123
Mark123's picture

Which proves the point - house prices are too high based on incomes.


I gather you do not support free markets?

Wed, 07/18/2012 - 13:44 | 2629012 MarsInScorpio
MarsInScorpio's picture

Both you and GM Mad Scientist have the concept.


Thanks for spelling it out.


Wed, 07/18/2012 - 09:37 | 2627729 caimen garou
caimen garou's picture

yes, the first house i TRIED to buy in 1978 the bank did a full body scan on me,did'nt get the loan because i was only worked at my job for one year.

Wed, 07/18/2012 - 09:06 | 2627612 firstdivision
firstdivision's picture

Refi's exploded this past week

Wed, 07/18/2012 - 09:10 | 2627625 Tyler Durden
Tyler Durden's picture

All on 20% spike in government HARPs

Wed, 07/18/2012 - 09:18 | 2627646 G-R-U-N-T
G-R-U-N-T's picture

Indeed Mr. Durden, they're advertising like crazy on the radio here in Southern Kalifornia.

Wed, 07/18/2012 - 09:06 | 2627615 Village Smithy
Village Smithy's picture

Odd that starts have increased so much over the last year but completions have barely moved the needle. I guess when you employ only 5 lucky framers to do an entire development it takes time.

Wed, 07/18/2012 - 09:18 | 2627645 GMadScientist
GMadScientist's picture

Especially in Arizona.

Wed, 07/18/2012 - 21:22 | 2630397 deebee
deebee's picture

guess it's hard to sell off the plan. If the builders don't have a good ratio of buyers to vacancies mid-completion, they will be reluctant to commit more capital to the project.

Wed, 07/18/2012 - 09:14 | 2627636 adr
adr's picture

Remember publicly traded builders can't stop building. Better to break ground on 500 properties and place a few cinder blocks, then stop. Rather than not do anything at all.

Every time permit numbers go up homebuilder stocks soar. It is absolute insanity. Then you have earnings releases where a homebuilder loses a couple hundred million and the stock soars because analysts thought they would lose more.

The boards of the homebuilders are laughing all the way to the bank.

Only in the world of the stock market can a corporation that loses millions see their stock soar, while a company can make millions in profit and see their stock tumble.

Wed, 07/18/2012 - 09:18 | 2627652 GMadScientist
GMadScientist's picture

5-piece pre-fab facades for everyone!

Wed, 07/18/2012 - 09:17 | 2627644 whoopsing
whoopsing's picture

A builder in my area during the heydays would build a shell and stop until someone bought it. I've been looking across the street at a half finished house for the last seven years. I'm quite certain that I will witness it slowly return back to the earth. What a fucking waste

Wed, 07/18/2012 - 09:24 | 2627660 GMadScientist
GMadScientist's picture

Better than looking at the ones left to rot by assholes that triple-liened in the insanity and are now on the lamb.

Wed, 07/18/2012 - 09:22 | 2627664 whoopsing
whoopsing's picture

Those are up the block

Wed, 07/18/2012 - 09:39 | 2627737 deerhunter
deerhunter's picture

the new 4G network.  God, guns, gold and a garden.  Know your neighbors and keep em close.  New networking,  50 rds 22 ammo for 10 lbs of flour.  Be ready,  good day.

Wed, 07/18/2012 - 10:33 | 2627945 blunderdog
blunderdog's picture

That God fucker doesn't pay well.  You can do just as well leaving his broke ass off the list.

Wed, 07/18/2012 - 11:45 | 2628293 Morrotzo
Morrotzo's picture

10 million foreclosed properties rotting away in slumlord "shadow inventory" with 10 million underwater on their mortgages dying to sell to some rube and the GOOD NEWS is that hundreds of thousands of houses are still being built. Holy motherfucker.

Wed, 07/18/2012 - 13:42 | 2628997 MarsInScorpio
MarsInScorpio's picture

+ 1000


Your terse post sums it all up.


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