(Forward-Looking) US Building Permits Plunge To 8-Month Lows In June

Tyler Durden's Photo
by Tyler Durden
Tuesday, Jul 20, 2021 - 12:39 PM

Amid a slew of weak housing sales data, weak mortgage applications, crashing homebuyer sentiment, and 11-month low homebuilder sentiment, analysts still expected both housing starts and permits to rise MoM in June... they were half right!

After a small downward revision in May, Housing Starts soared 6.3% MoM in June (massively beating expectations of +1.2% MoM), but... Building Permits, which are forward-looking of course, saw a third straight month of declines, plunging 5.1% MoM (far worse than the +0.7% MoM expected)...

Source: Bloomberg

This pushed the Permits SAAR below Starts for the first time since Jan 2020, and to its weakest since Oct 2020...

Source: Bloomberg

Under the hood, Single Family Starts rose 6.3% SAAR to 1.160MM, the highest since March, and Multi Family (rentals) Starts were up 6.8% to 474K, highest since July 2020...

But Permits were far more ugly, with Single Family Permits down 6.3% to 1.063MM SAAR, lowest since August 2020; and Multi Family Permits down 1.6% to 483K SAAR, lowest since Dec 2020.

This is not a pretty picture for the future.

Exorbitant materials costs, combined with shortages of land and labor, have thwarted developers seeking to ramp up construction. Supply concerns and a slowdown in sales pushed builder confidence down to an 11-month low in July, a survey from the National Association of Home Builders showed Monday.

An inventory crunch that followed solid demand last year has sent prices soaring, tempering buyer interest. A record 71% of consumers said higher prices were a reason why buying conditions have soured, according to July data from the University of Michigan.