While today's economic data is likely too late to influence the Fed's decision which is now due in just over 5 hours, moments ago the latest housing starts and permits data painted another mixed picture, with Starts declining to a three month low of 1,126K, missing expectations of 1160K, and below last month's downward revised 1161K. The miss was a result of housing starts in the Northeast tumbling by 34% to 108K, the lowest prince since March now that the tax-driven surge, which we discussed previously expired in July, is over.
In August, while single-family starts dropped, so did multi-family or rental units. Notably, while housing starts are still just barely above half the pre-crisis peak, rentals continue to rise ever higher as more and more Americans have no choice but to downgrade their American dream to renting for life.
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But while starts data was slightly weaker than expected, permits came in a fraction hotter, at 1170K, up from a revised 1130K, and above the 1159K expected. Like with starts, Northeast saw a decline but far less pronounced at just -4.4%, while all other regions saw a modest pick up. And just like with starts, multi-family permits continue to rise well above single family, up 21.5% vs 8.7% respectively.
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So if the Fed's intention with 7 years of ZIRP was to force the middle class out of owning a house and into renting, it has succeeded.
