Permits Plunge But Starts Surge As Housing Data Suggests Rough Future Ahead

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...


Stu Elsample Tue, 06/19/2018 - 08:41 Permalink

Media ignored FACT>>>> Black welfare rats hurt home sales and property value more than all else. Once one moves into a home, nearby property values will ALWAYS drop.

racehorse Tue, 06/19/2018 - 08:50 Permalink

I'm currently looking at building a house and lumber prices are insane right now.  I'm hoping they get back inline within the next year.  Will lumber production pick up in US??

booboo racehorse Tue, 06/19/2018 - 09:15 Permalink

If it’s anything like the last crash material prices will not budge, labor price will drop until a million Mexicans head back to Texas to border hop then we will be left with uppity white millennials that wouldn’t know a 2x4 from a sheet of plywood. The government will do what it always does, print free paychecks and your dollar will by half again what it used to. Buy a camper, those will be cheap and rent out an acre of pasture from a land owner or space on a hunting lease.

In reply to by racehorse

Son of Captain Nemo Tue, 06/19/2018 - 08:53 Permalink

Just like the pictures Tyler(s) has been famous for showing the overflow lots of vehicles in North America with cars being built with energy we no longer can afford to build them with...

They also should show pictures of the neighborhoods upon neighborhoods of brand new dormant residential properties throughout the Country in excruciating detail over the past 15 years with real estate locks on the doors that will remain "off the books" to our collective "rapture"!

SillyWabbits Tue, 06/19/2018 - 08:53 Permalink

If you don't need to sell there's a bubble.

If you need to sell the bubble has burst.

Unless you're a Real Estate Agent,  then it's a great time to buy.

Commission driven income blinds the mind to facts.

Oldwood Tue, 06/19/2018 - 08:56 Permalink

The future always look rough. That's why we traditionally try to avoid thinking about it. Gamblers live on that shit however, trying to induce everyone to bet on the unknowable by convincing them they know what they don't. People who truly know the future are considered insider traders and illegal.

MuffDiver69 Tue, 06/19/2018 - 09:02 Permalink

Need to clean out existing supply anyways and try getting a building permit in some parts of the country...thats the reason you see the multi-family in these parts all policies are geared to discouraging new subdivisions etc...Way more behind numbers then a couple charts..

everything1 Tue, 06/19/2018 - 11:04 Permalink

Gangbusters where I live.  Cranes up everywhere, reminds me of pre-last-recession, although I think the next one will play out a little slower.

  That's what happens when government says they are going to raise rates, people run to spend, er, I mean borrow as fast as they can.  And, the builders build them as cheap as they can, bring on the cheap materials, build cheap crap, charge allot, drive up home prices, and raise property taxes.

Emperor_Norton Tue, 06/19/2018 - 12:13 Permalink

Very first paragraph of the subdivision description on my property deed- "no building permits required"

no, I will not tell you where I live. Stay the fuck away. 

alfbell Tue, 06/19/2018 - 12:39 Permalink

BS article. Contradictory. There are "seller markets" all over the US. Inventory hasn't been being built up since 2008. Big need for SFRs and multi-family in the active job areas. Plus Boomers are downsizing. I'm just about to start building custom spec homes like I was back in the early 2000's. Big profits to be made.