The Bidenomics Plunge! Single-Family Home-Starts Plunged In December (But Permits UP)

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While the Nestea plunge was meant to be refreshing, the housing starts plunge is not refreshing at all. Just another warning about the shortcomings of Bidenomics.

Despite mortgage rates having tumbled (relatively-speaking), and homebuilder sentiment picking back up post-Fed-pivot, expectations were for a plunge back to reality for Housing Starts in December after November’s unexpected surge. Permits were expected to rise only very modestly.

Analysts were right in direction but wrong in magnitude – too bearish. Housing starts declined 4.3% MoM (vs -8.7% MoM exp and +10.8% MoM in November, a big downward revision from the initial +14.8% MoM). Building permits also rose more than expected (+1.9% MoM vs +0.6% exp but saw November’s 2.5% MoM decline upwardly revised to -2.1% MoM…

Source: Bloomberg

On a SAAR basis, Housing Starts and Building Permits are higher YoY

Source: Bloomberg

Under the hood, single-family permits rose for the 12th month in a row (i.e. every month in 2023) but single-family home starts plunged 8.6% MoM after surging 15.4% MoM in November… that is the biggest monthly decline since July 2022…

Source: Bloomberg

Perhaps the optimism among homebuilders about future sales is a little overdone given their actions?

Source: Bloomberg

And why would starts be down so much if rates are tumbling?

Source: Bloomberg

Still along way to go for mortgages to be affordable…

Source: Bloomberg

Will less supply of new homes do anything to help the Shelter component of CPI (hint – no!).

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Published by confoundedinterest17

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