After 3 months of exploding building permits - driven exclusively by the Northeast region as a result of an expiring property tax break in NYC, reality bit in July as permits plunged 16.3% to the lowest since March (biggest drop since June 2008), down to 1.119MM from 1.337M last month, and far below the 1.228M expected, confirming once again that economists did not even have a clue about the driver behind the recent surge, even though as we warned just before the number was announced...
Northeast housing permits set to tumble
— zerohedge (@zerohedge) August 18, 2015 [5]
Sure enough that's precisely what happened.
[6]
This was also the biggest miss on record for permits.
Housing Starts rose less than expected but thanks to a dramatic upward revision are stable at around 1.2 million units SAAR (driven by a rise in single-family units trumping multi-family units), although in absolute terms at 1.206MM, the number was fractionally better than the expected.
The 3 month surge into the NYC property tax break expiration has ended:
[7]
The good news, and the reason why the USD suddenly found a modest bid, is that Single-family starts once again picked back up.
[8]
Looks like we are going to need some more tax break expirations to keep the housing recovery dream alive.
