Overnight, when previewing today's housing starts number, SocGen forecast that "housing starts to rebound; On the data front, housing starts in March should increase by 17% mom, reversing the steep drop in February."
Bank of America added:
We look for housing starts to rebound sharply to 1.035 million in March after the disappointing drop in February. The decline in February was concentrated in the Northeast which witnessed a 57% decline in the month. This seems extreme and likely a function of poor weather conditions, which should support a recovery with the start of spring. Moreover, building permits are running at 1.102 million in February, suggesting starts should rebound to be more in line with the pace of permits. Much of the gain in permits has been in multifamily, which will likely show through in the starts figures in March. However, we also expect an improvement in single family starts, consistent with the strong gain in new home sales in February and low inventory levels.
Oops.
Moments ago the Department of Commerce reported March starts and permits data, which after the February collapse was expected by everyone to rebound strongly because, well, it didn't snow as much in March as it did in February. Apparently it did, because not only did Housing Starts miss massively, and just as bad as in February, printing at 926K, on expectations of a 1.040MM rebound from last month's revised 908K, but permits also missed and in fact declined from last month's 1102K to 1039K, which as Joe Lavorgna "explained" last month is confusing:
For a start to be counted, ground needs to be broken. That can’t happen if the ground is frozen. This would not effect permits.
— Joseph A. LaVorgna (@Lavorgnanomics) March 17, 2015 [10]
Worse, while single family starts continue to drag along a level that is largely unchanged since the end of 2012, multi-family starts tumbled to the lowest since September 2013 at 287K, suggesting the rental boom is truly finished.
Not surprisingly, the same thing happened with permits which dropped by 5.7% from March, driven by a 16% plunge in multi-family permits to 378K as the rental boom is now slowing down across all stages of production.
And now we await for all those who, until yesterday saw a surge in housing data, to promptly remember what the weather was in March and blame their inability to forecast one month into the future, on that.
Which is ironic because the average March temperature was far higher than normal...




