"It's The Weather, Duh"

Earlier today, the NAHB released its latest builder confidence report. Something stood out to us, namely the following data, which shows that while confidence picked up modestly in the Northeast in April, it tumbled in the West and Midwest.


And three month average:


What's the explanation for this ongoing deterioration in housing market sentiment in states that had, not only were not impact by the "vortex" but if anything, were "crushed" by the balmy March atmospheric conditions? Why, "it's the weather, duh."

* * *

Economist-level stupidiy aside, even Corelogic now sees through the BS of a US consumer who is tapped out not because of "harsh weather" in the winter, but because the US economy is running on fumes.

  • Severe winter weather experienced over the past few quarters does not “sufficiently explain” weakness in housing starts, write CoreLogic analysts Molly Boesel and Katie Dobbyn in a research report.
  • Single family housing starts dropped 13% m/m in Jan., held steady in Feb., must break down starts by region to account for weather differences across the continent
  • Housing starts in the midwest dropped 55% in Jan., in the south dropped 11%, northeast increased by 8%, west increased 11%
  • Using temperature data from Jan. 1984 to Feb. 2014 compared to historic housing starts:
  • According to historic patterns midwest should have dropped 6% in Jan., fallen 11% in Feb.; northeast should have seen -6%/-5%; south -2%/-1%
  • Midwest’s 55% drop in housing starts in Jan. cannot be completely attributed to the weather, nor can northeast and south’s declines
  • Analysis points to recovery of starts this spring, but likely not enough to counteract current market weakness

Ok, maybe it's not "the weather, duh." But if the generic scapegoat to explain every economic miss in the first three months of the year is now dead and buried, it can only mean that now even the permabulls have no choice but to accept the unpleasant reality of what is really going on beneath the surface - long since devoid of a snow cover - of the US economy.


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