Housing Starts, Permits Collapse In September (Spoiler Alert: It Wasn't Just The Storms)

Following last month's bounce in permits (later revised lower), September expectations were for a decline of 2.1% (presumably analysts knew of the storms' potential impact when they guessed) but it utterly collapsed - down 4.5%. Worse still Housing Starts were supposed to drop just 0.4% in September but crashed 4.7%.

These are 2 to 3 standard deviation misses of expectations... so don't simply blame the storms as analysts were well aware that they occurred when they made their forecasts...

 

Notably, muiltifamily starts tumbled to 286K, lowest since Sept 2016...

And it was clearly not just the hurricanes - starts dropped in every region except The West:

  • Northeast: -9.2%
  • Midwest: -20.2%
  • South -9.3%
  • West: +15.7%

Some context...

 

But buy homebuilders...

Comments

LawsofPhysics Wed, 10/18/2017 - 08:42 Permalink

Building real shit like houses requires real resources like land, timber, steal, and real work...good thing the people in banking and finance don't have to deal with such things as the FREE MONEY (ZIRP/NIRP) just keeps flowing..."Full Faith and Credit"

ed31337 Five Star Wed, 10/18/2017 - 11:09 Permalink

Who wants to pay for worthless permits and get forced into building an overpriced McMansion when it's STILL going to burn down like what is happening to thousands of homes in Northern California or getting flooded out like in Texas/Florida? "Permits Protect" -- total bullshit. As if a flimsy piece of paper is going to stop Mother Nature or North Korea's nuclear bomb...Peeps these days are either living in their parent's basement (too poor), renting (becoming poor), or building themselves a tiny house on wheels (side stepping permits).

In reply to by Five Star

spastic_colon Wed, 10/18/2017 - 09:14 Permalink

who cares IBM is up today on fake earnings even tho its down 15% YTD........it only affects the index if it is up apparently....the VIX will also be worked and be up today; all that matters is that all of the stocks that have the biggest influence report on the same day as the fed meeting after the end of the month..............NOT a coincidence.........also, the "new" fed chair will be strategically announced around then too; must take the luster off the balance sheet phony reduction.

asteroids Wed, 10/18/2017 - 09:23 Permalink

Take a look at Japan after their banking/real-estate fiasco in the 80's. Their "markets" never recovered in order to save their zombie banks. The US and the rest of the world is following closely behind. Disaster is inevitable. Make take time though.

Consuelo Wed, 10/18/2017 - 11:00 Permalink

  'The West' = FAANG economy.   Nothing more, nothing less.Boiled down further, it = The 'social media' economy.Boiled down to rue, it = What I ate last night and how it looked coming out the other end in pristine S8 OLED resolution.The 'new economy' in other words.  

surf@jm Wed, 10/18/2017 - 13:31 Permalink

Yeah, but homebuilders take out 0% FED loans to buy back their stock, so the CEO can buy the GI joe, with the Kung Fu grip......Thats why government pensions buy homebuilders.........