After April's disappointing dip in starts and permits, and following an unexpected drop in homebuilder optimism (blamed on surging lumber prices, and therefore Trump), May was expected to see a modest rebound - but it didn't work out that way.
It was a very mixed picture that paints an ugly scenario for what comes next...
Housing Starts surged a huge 5.0% MoM in May (smashing the 1.9% rebound expected) after a revised 3.1% drop in April.
Building Permits plunged a shocking 4.6% MoM (notably worse than the 1.0% decline expected) and dramatically worse than the revised 0.9% MoM drop in April.
Starts rose most since January as Permits puked most since Feb 2017...
The surge in Starts was driven by an 11.3% spike in multifamily starts to 404K from 363K, highest since January. Single-family starts up 3.9% to 936K from 901, highest since November.
The permits plunge was driven by multifamily (rental) permits, which dropped 8.5% from 460K to 421K, lowest since February. Single Family permits dropped 2.2% from 863K to 844K, lowest since September.
Also of note that is the new-, pending-, and existing-home sales all dipped in April (and after a brief rebound).
Broadly speaking, US housing data has been notably disappointing this year, and homebuilder stocks are following that trend...