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Housing Starts Post Biggest Drop Since August 2011 As Permits Rise

Tyler Durden's picture


We just got another indication of how US housing has "bottomed"... if only in terms of promises and strong words. While permits, or promises that at some point in the indefinite future, a house will be built, soared from 723K to an annualized rate of 780K, the highest since September 2008, on expectations of a 730K print, actual holes dug, or Starts plunged from a revised 744K to 708K, the biggest miss of expectations of a modest improvement from the pre-revision number since April 2011, and the biggest sequential drop since August 2011. And while recently all the starts strength was in multi-family units as America prepares to become a renter society, in May it was actually the 1-unit houses that saw an increase from 500K to 516K units, as multi-family tumbled from 236K to 179K. So much for the REO-To-Rent plan? Finally, looking at actual completions, the number tumbled by 10.3% from an annual rate of 667K to 598K in May.


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Tue, 06/19/2012 - 08:43 | 2538940 MFL8240
MFL8240's picture

Recovery Summer!

Tue, 06/19/2012 - 08:50 | 2538958 Manthong
Manthong's picture

A big boom coming in the need to dig holes.

Tue, 06/19/2012 - 09:03 | 2539021 GeezerGeek
GeezerGeek's picture

Come November I expect many holes will be dug and filled with the corpses of political careers.

Tue, 06/19/2012 - 09:09 | 2539043 Caviar Emptor
Caviar Emptor's picture

I built a lean-to out of twigs. That counts!

Tue, 06/19/2012 - 09:17 | 2539067 Taterboy
Taterboy's picture

Lower housing starts? That's just racist,you know.

Tue, 06/19/2012 - 09:35 | 2539128 Bicycle Repairman
Bicycle Repairman's picture

Housin' ain't comin' back, yo!

Tue, 06/19/2012 - 10:24 | 2539323 icanhasbailout
icanhasbailout's picture

Wait 'til you get a load of my new single, "Fat Bottomed Housing"

Tue, 06/19/2012 - 10:08 | 2539248 johnnynaps
johnnynaps's picture

Big whoop! The same soon-to-be political corpses you talk of will still get paid and receive benefits for driving the rest of us into serfdom.

Tue, 06/19/2012 - 09:02 | 2539015 HelluvaEngineer
HelluvaEngineer's picture

Don't distract me with hard numbers.  The only thing I care about is sentiment!

Tue, 06/19/2012 - 09:07 | 2539035 CClarity
CClarity's picture

And there we have the "weather phenomena".  With all that good weather over the quarter . . . why weren't they digging holes?  Too busy shopping?  Once again, it just doesn't really add up.  

Or maybe it's that pesky offered credit forward to fund the consumption.  Working for autos and for a long time worked for mattresses . . . but I haven't seen anyone offering 0% down and 0% interest on lots lately.  Same on new construction loans.  There - fixed it.  Let the next lending frenzy begin.  sarc/

Tue, 06/19/2012 - 09:11 | 2539046 Caviar Emptor
Caviar Emptor's picture

I agree, no hard data necessary. And beyond even sentiment, what's more important is wizardry and predicting the future based on gopher entrails

Tue, 06/19/2012 - 09:52 | 2539195 eurusdog
eurusdog's picture

Heathens...bones in bowls, bow before the one true printer, lord, god Ben!

Tue, 06/19/2012 - 09:33 | 2539115 RickyBobby
RickyBobby's picture

In Texas there is an enormous skilled labor shortage and we can't build without labor. I own a subcontracting biz. I could triple my work if I could find the labor.

Tue, 06/19/2012 - 09:48 | 2539179 I Got Worms
I Got Worms's picture

What area of skilled labor is most needed? I'm a burned out lawyer trying to talk my wife into letting me chuck my law career and go to welding school in Houston. Shockingly, not having much luck with my argument. :-\

Tue, 06/19/2012 - 14:03 | 2540197 riley martini
riley martini's picture

 Welding is hell on the health but pays well after a couple years of training . Tex is having trouble finding skilled labor beceuse the pay is probably about the same as Mexico cost adjusted. I know alot of subs who never seem to get the pay retention effect.

Tue, 06/19/2012 - 10:53 | 2539421 otto skorzeny
otto skorzeny's picture

thank the Bernank and $100 a barrel oil-remember Texas in the 80s-a bigger shithole than it is now

Tue, 06/19/2012 - 18:30 | 2541050 marcus popus
marcus popus's picture

I have a contracting business in the mid east. Can i send you some illegals from here, they're skilled.  Most illegals have retired on US social security and worker comp awards.

Tue, 06/19/2012 - 08:44 | 2538941 InsurgoCasca
InsurgoCasca's picture

Bullish. Simply bullish.

Tue, 06/19/2012 - 08:45 | 2538946 caimen garou
caimen garou's picture

now I know how to play this market, bad news buy equities,good news sell equities, what a scam!

Tue, 06/19/2012 - 09:16 | 2539061 scatterbrains
scatterbrains's picture

My theory is you have to, Like Lehman, be bullish on the collapse of the American economy. The faster shit implodes the higher stocks like LULU and AAPL will rise on the fed printing treadmill. Come on Benny you can do it man, just push the button already.




Tue, 06/19/2012 - 08:47 | 2538952 fonzannoon
fonzannoon's picture

Seeing as I base all my investment decisions on whether or not they will dig a hole in the ground at some point I have to say this is absolutely perplexing.

Tue, 06/19/2012 - 08:54 | 2538977 otto skorzeny
otto skorzeny's picture

Kohl's dug a hole in the ground here this spring- saw where the economy was headed and just up and quit building-the equipment and mounds of dirt are just sitting there-BULLISH. not to mention 3 more small businesses in strip malls have closed in the last month

Tue, 06/19/2012 - 08:57 | 2538992 TrainWreck1
TrainWreck1's picture

Smart planning by Kohl's. Getting ready for that consumer rush that's just itchin to happen, any moment now.

We should be digging holes everywhere.

To be honest, I'm giddier than Cramer right now, especially since Europe is fixed and all better.


Tue, 06/19/2012 - 09:03 | 2539022 HelluvaEngineer
HelluvaEngineer's picture

I used to shop at Kohl's, until their clothing turned paper thin and the price doubled.  20% off?  No thanks.

Tue, 06/19/2012 - 09:20 | 2539068 JohnKozac
JohnKozac's picture

My friend tells me even his Ebay sales are way down....brand new stuff reduced 90% and still don't sell.....

"Bleak" is the New Normal.

Tue, 06/19/2012 - 08:50 | 2538957 cossack55
cossack55's picture

I want to invest in holes. Any recommendations on funeral parlors.

Tue, 06/19/2012 - 08:56 | 2538988 Saro
Saro's picture

No, but sugar-daddy dating sites, on the other hand . . .

Tue, 06/19/2012 - 08:59 | 2539001 TrainWreck1
TrainWreck1's picture

Odd, all the ads I see are 'sexy septuagenarians'

Tue, 06/19/2012 - 10:13 | 2539279 johnnynaps
johnnynaps's picture

There's a lucrative demographic with very little competition where I live. I should have my Funeral Directors license in about a year....wanna invest?!

Tue, 06/19/2012 - 08:50 | 2538960 otto skorzeny
otto skorzeny's picture

The only thing getting built around here are the Del Webb shitboxes for the boomers. Basically 4 plastic wrapped walls/2000 sq ft  for $350K and an $8000 property tax bill(so the local podunk cops can make 80K a year to enforce water sprinkler rules)

Tue, 06/19/2012 - 09:03 | 2539017 Conman
Conman's picture

Sounds like you are around Vegas. Del Webb still building shit out there with the shitload of inventory still unsold?

Tue, 06/19/2012 - 09:05 | 2539027 otto skorzeny
otto skorzeny's picture

SW Chi-town burbs- because IL is the first place the "smart" retirees  think of

Tue, 06/19/2012 - 09:04 | 2539028 HelluvaEngineer
HelluvaEngineer's picture

That's a better deal than the Boomers deserve, IMO.

Tue, 06/19/2012 - 10:13 | 2539280 Metalredneck
Metalredneck's picture



My boss dug a hole two years ago to build a new shop.  Still a hole.

Tue, 06/19/2012 - 08:51 | 2538962 Jason T
Jason T's picture

construction sector has been losing jobs for 5 months straight..



Tue, 06/19/2012 - 08:51 | 2538963 drchris
drchris's picture

I almost jumped on the multi-family bandwagon.  I found a great short sale that would make good money if fully rented, but then I noticed all the "For Rent" signs in the neighborhood.  I don't know where people are living.

Tue, 06/19/2012 - 08:54 | 2538980 LoneStarHog
LoneStarHog's picture

Hint! ... Have you noticed that gasoline demand is way down because vehicles (homes) are not being driven ... and ... large appliance boxes are not being recycled ... and ... parents have been cleaning out basements?

Tue, 06/19/2012 - 08:54 | 2538981 otto skorzeny
otto skorzeny's picture

in holes

Tue, 06/19/2012 - 09:58 | 2539216 LoneStarHog
LoneStarHog's picture

Yup! I have to wonder how many homeless families will be found the next time Obozo gets his Presidential Colonoscopy? Might also finally find Jimmy Hoffa.

Tue, 06/19/2012 - 09:50 | 2539189 roadhazard
roadhazard's picture

If they aren't at there parents they are living ten to a trailer illegal Mexcan style.


God bless Amerika.

Tue, 06/19/2012 - 10:27 | 2539334 Bicycle Repairman
Bicycle Repairman's picture

Why pay rent that is equal to a mortgage payment?  Mom and dad have plenty of room in the McMansion.  Use the mother-in-law apartment they never should have built.  There's no stigma in living with M&P anymore, since everyone is doing it.  M&P need help paying the absurd property taxes.

Tue, 06/19/2012 - 08:52 | 2538965 LoneStarHog
LoneStarHog's picture

So...does this mean that Mr & Mrs Obozo will have to rent a place next January?

Tue, 06/19/2012 - 09:09 | 2539044 GeezerGeek
GeezerGeek's picture

Well, they do already have that place in Chicago, made nicer by the land deal they made with their friend Mr. Rezko. I wonder if Michelle can put up with Chicago weather after having visited all those nice places around the world.

Tue, 06/19/2012 - 09:45 | 2539168 LoneStarHog
LoneStarHog's picture

Why is it that every time I post about Obozo he gives me a negative? I guess moving from Chicago to WaShitOn destroyed his sense of humor. Well, not completely since he appointed Hillary as Secretary of State.

Tue, 06/19/2012 - 08:53 | 2538971 orangedrinkandchips
orangedrinkandchips's picture

Seriously, Real Estate from what I gather is going bangbusters AGAIN. In Phoenix, you can get your very own patch of dry hot sand for between 100k-300k. That level is moving so fast with multiple bids. Anything above that tends to stay on the market I am told by agents.


I see it here in Chicago too...people thinking it's going back to unsustainable levels.....


HIGHBALL....I think that is the term....Let's say I want to sell you a turd for 10 say....that is shit! I I will give it to you for.....wiat for it.....6 bucks!!! 40% off!!!! THAT IS A SORE DICK....YOU CANT BEAT IT!


But, you know all along it's not worht ANYTHING....BUT the psychological numbers make you believe it's a deal!


This is a bump up on the never ending decline....hope floats....


real estate sucks ballls

Tue, 06/19/2012 - 08:56 | 2538989 otto skorzeny
otto skorzeny's picture

in Chicago? wait til the property taxes statrt jumping 20% a year to plug the Cook County pension gap

Tue, 06/19/2012 - 09:19 | 2539064 orangedrinkandchips
orangedrinkandchips's picture

Dear NOT get me started.

Real Estate taxes are one thing that are outrageous and not even mentioning tolls or parking. Illinois is the worst of the 50. No doubt about it. On all levels.

Thank God Scott Walker won up north....I mean, cmon....we the tax suckers are paying for their "pension"...going to fat, surly and lazy pieces of shit???


Pensions are great, if you got em. And they are great IF YOU FUND YOUR OWN PENSION akin to 401k. But to have these Cook Cunty employees make 100k pension for DOING JACK SHIT.


So, let me get this straight....we the tax suckers(total fucking losers of Illionis) FUND the pensions that go to these "(un)civil servants"...and if they die it goes to their spouse. We fund it 100%.

So far so get these overpaid PM who blow the fund to pieces with a bazooka given to them by Satan himself, Ben Berkanke. So, with negative rates (not even real rates!!!) you cant blame them too much as interest is a thing of the past.


So, the PM gets paid. The pensions get paid. We pick up the pieces. SOCIALISM AT ITS BEST!




I hate playing the fool.....but atelast I have company!

Tue, 06/19/2012 - 09:21 | 2539083 Taterboy
Taterboy's picture

Not a problem. Come Jan. 21 they'll have themselves an experienced community orgasmizer to fix that pension thingamajig.

Tue, 06/19/2012 - 08:59 | 2539002 Temporalist
Temporalist's picture

Do you work for the 24 hour shopping channel?  I really want a set of 100 knives that can never be sharpened and have no use for anything.  How much?

Tue, 06/19/2012 - 08:55 | 2538984 sockratte
sockratte's picture

how to feed a bubble with a leak...

Tue, 06/19/2012 - 08:57 | 2538996 Stuart
Stuart's picture

holes represent reality, permits represent talk and talk is cheap.  Watch what they do, not what they say and what they're doing is slowing down.    

Tue, 06/19/2012 - 09:00 | 2539010 Nid
Nid's picture

Stock Futures rally on the news.

Tue, 06/19/2012 - 09:03 | 2539020 TrainWreck1
TrainWreck1's picture

Holesale numbers are up?

Tue, 06/19/2012 - 09:06 | 2539012 Stuart
Stuart's picture

It's all a confidence game at this point.  Governing authorities and fraud artists trying desperately to keep the masses ignorant and uniformed, at the very least confused.   This is why all the contradiction and obfuscation.   Keep the dumb public unfocused so they cannot aim their anger anywhere while that small core with an over deluded sense of entitlement plunder the publics' trust and the publics' hard earned wages.   This will end as it always has.   Whatever happened to free enterprise, old fashion honest capitalism reinvesting savings and earning wealth through productivity and entrepreneurial spirit.   All the power to people who can do this.  We need more of them instead of parasitic rent seekers.

Tue, 06/19/2012 - 09:44 | 2539163 catacl1sm
catacl1sm's picture

Regulations, Red Tape, Barriers to Entry.

Tue, 06/19/2012 - 09:08 | 2539032 JohnKozac
JohnKozac's picture

No one wants an overpriced wooden box anymore.



Tue, 06/19/2012 - 09:13 | 2539051 JmanSilver.Gold
JmanSilver.Gold's picture

Well, here we are 3 YEARS after Cramer called 'the bottom in housing',,,,June 30, 2009.  I guess that NOW, he can go on his CNBS clown show, and really, really, REALLY mean it this time !   Strong government data to support the rant too.  zzzzzzzzzzzzzz

Tue, 06/19/2012 - 09:13 | 2539055 Genève Barbegazi
Genève Barbegazi's picture

 buy foreclosed homes and become a slumlord millionaire.... fuck yeahyuhhh

Tue, 06/19/2012 - 09:18 | 2539074 skipjack
skipjack's picture

24 months ago my neighbors put their house up for sale - 3400 sq ft and 5 acres with horse barn for 500k.  18 months later it came off the market, having only received one bid of 385k which they declined.  They spent the winter adding custom kitchen and bathroom (2.5) cabinets and granite countertops, as well as a ton of landscaping, to the tune of about 50k.  House went back onthe market last month for...drumroll...425k.  lol, should taken the 385k, right ? but he's a bankster so of course their place was special and worth more lolol.  3 weeks and counting and they haven't had even one showing - they're panicking and don't understand why the market is so bad...and now they have a loan for the 50k of upgrades that they have to pay.


Only a bankster could be such a dope in this market.

Tue, 06/19/2012 - 10:05 | 2539242 I Got Worms
I Got Worms's picture

If they can't get their dough back with the kitchen upgrades, there's alway Jew Lightning!

Tue, 06/19/2012 - 09:23 | 2539090 adr
adr's picture

Wha do you think would happen if all the great publicly traded home builders said there was enough supply and they quit building?

They need to keep filing permits and buying land or their stock goes to zero. A failed development by me has started breaking ground again after five years. What were supposed to be $450k+ homes are now listed to be $250k+. Th catch is you must put 20% down as a deposit before the builder will start the home.

Good luck. Full retard still doesn't cover it. PERMITS ARE UP, LET'S BUY HOMBUILDER STOCK AND DRIVE THE PAPER UP 20%, WHOO!

Tue, 06/19/2012 - 18:38 | 2541068 marcus popus
marcus popus's picture

short DHI.

Tue, 06/19/2012 - 09:25 | 2539095 monopoly
monopoly's picture
We still have more homes than we need, and more come on the market as the broken banks continue to foreclose on millions.  And we are building more homes because?
Tue, 06/19/2012 - 10:23 | 2539317 kridkrid
kridkrid's picture

Madness.  Someday this war's going to end.

Tue, 06/19/2012 - 09:26 | 2539098 Village Smithy
Village Smithy's picture

Up until now the homebuilders have been exaggerating starts in a plan to get the muppets to invest in XHB. That plan failed so now its time to flip the numbers and go to Uncle Ben with hat in hand. Muppets are getting smarter but smarts can't replace a direct line to the cash cow.

Tue, 06/19/2012 - 09:36 | 2539130 Tum
Tum's picture

I will be anxiously awaiting reports of the housing recovery evidenced by housing permits. derp.

Tue, 06/19/2012 - 09:37 | 2539135 Toolshed
Toolshed's picture

And here comes another "article" from the sage Lee Adler telling us the bottom is in and it's all happy happy joy joy from here on 5, 4, 3, 2, 1...........


Ok Ilene, what have you done with Lee?



Tue, 06/19/2012 - 09:45 | 2539164 deez nutz
deez nutz's picture

There is always a subordinate number that follows the "bad news" announcement that points to "things getting better"........  but it never does.  Bullishit!!

Tue, 06/19/2012 - 09:47 | 2539176 TideFighter
TideFighter's picture

I'm even more sentimental about more house fires.

Tue, 06/19/2012 - 09:55 | 2539205 TWSceptic
TWSceptic's picture

Why is gold falling? Especially in euro.

Tue, 06/19/2012 - 10:34 | 2539359 MFL8240
MFL8240's picture

Because the world is filled with nothing but courrption!

Tue, 06/19/2012 - 10:10 | 2539261 lynnybee
lynnybee's picture

who would buy a new house when the used  houses are so cheap!   condos in my area have been slashed by over half and no one is buying..  i was at the LOWES store the past few days looking at replacing my old refrig, they were so busy i had to make appointments for both the appliance guy and the replacement window man!   people buying and taking out credit like there was no tomorrow!    no one at LOWES knew it was the end game except me!!

Tue, 06/19/2012 - 10:33 | 2539353 MFL8240
MFL8240's picture

Housing down and the stock market up 100 points!  hahahahahahahahahaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa clown show

Tue, 06/19/2012 - 10:43 | 2539394 Snakeeyes
Snakeeyes's picture

Detached homes rose, but multifamily fell over 20%. Add in the job openings crashing and this is hell.

Since I am debating Jared Bernstein on Thursday at the National Press Club, I included a video of VP Joe Biden discussing our housing market, It is unreal!

Tue, 06/19/2012 - 11:00 | 2539444 BudFox2012
BudFox2012's picture

Well, I hear housing starts in tent cities for homeless families are spiking.  They are breaking ground on new tents/shanties/cardboard boxes each day...

Tue, 06/19/2012 - 11:22 | 2539563 optimator
optimator's picture

Somehow Obama has to get the new vot, er, citizens, into new homes so they can live the American nightm, er, dream.

Tue, 06/19/2012 - 12:21 | 2539814 xcehn
xcehn's picture

Immense tracts of empty houses and signs indicating new homes to be built soon on even more huge tracts of former farm land. Yet, no buyers. A completely dead housing market from all appearances, yet it's good news for the housing market, of course. LOL This is akin to all the other government and corporate cooked reports.

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