Despite Record Builder Sentiment, Housing Starts Collapse Led By Rental Unit Crash

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by Tyler Durden
Thursday, Sep 17, 2020 - 08:39 AM

After yesterday's record-high homebuilder sentiment, it may seem odd that analysts' expectations were for a small drop MoM in Housing Starts (and only a modest rise MoM in Building Permits) in August. July's massive rebounds in both housing market measures may just have been the peak in the 'v'-shaped pent-up supply as Housing Starts plunged 5.1% MoM (-0.6% MoM exp) and Building Permits dropped 0.9% MoM (versus +2.0% MoM exp).

Source: Bloomberg

Additionally, the data for July was revised notably lower...

Source: Bloomberg

While single-family home starts rose, the rental units crashed in August...

  • 4.1% jump in single family units from 981K to 1021M

  • 25.4% drop in multi-family units from 503K to 375K

Similar pattern played out in Permits with rental units crashing...

  • 6.0% jump in single-family units to 1.036MM, highest since 2007

  • -17.4% drop in multi-family (rental) units to 381K

Finally, as a reminder, while homebuilders are exuberant about the future, homebuyers (despite a rebound) remain notably less enthused...

Source: Bloomberg

No matter how much the homebuilders build, perhaps the buyers won't come this time?