US housing starts have declined in March by -17.2% since the same time last year (YoY) as The Fed rapidly removes Covid-related monetary stimulus (green line).
On the positive side, 1-unit detached housing actually rose by 2.74% from February to March (MoM). However, 5+ unit (multifamily) starts decline -6.71% MoM. Permits are similar: 1-unit permits were up 4.07% in March from February while 5+ unit permits were down -24.27%.
Housing starts out west were down -28.13% MoM as people are escaping “Gruesome Newsom Land” (aka, California). Starts are up by 6.8% MoM in The South.
“Hey Aunt Nancy, do you think American voters will vote for me for President after I helped destroy California? Can I be President and spend like a mad man like you did as Speaker of the House??”
A classic good news, bad news story. The good news? US new home sales rose 5.8% in November, better that the expected -5.1%, The bad news? On a year-over-year basis, US new home sales FELL
Sales of new US homes unexpectedly rose in November, suggesting some stabilization in demand as mortgage rates eased late in the month from their highs.
Purchases of new single-family homes increased 5.8% to an annualized 640,000 pace last month after rising in October, government data showed Friday.
A mid-month retreat in 30-year mortgage rates back below 7% along with an increase in builder incentives may have helped support demand. Still, the sales data are volatile from month to month. With home prices remaining elevated and the Federal Reserve poised to raise interest rates further, headwinds for the housing market will persist into 2023.
The increase in sales last month was concentrated in the West and Midwest.
The report, produced by the Census Bureau and the Department of Housing and Urban Development, showed the median sales price of a new home was up 9.5% from a year earlier to $471,200.
There were 461,000 new homes for sale as of the end of last month, though the grand majority remain under construction or not yet started. The number of homes sold in November and awaiting the start of construction — a measure of backlogs — rose to the highest since the beginning of the year.
But for all the cheerleading, new home sales were DOWN -15.3% on a year-over-year basis. The ninth straight month of negative new home sales growth.
At least the median price of new home sales was down -2.79% from October to November.
Of course, Friday was one of those “Black Fridays” for investors. And pension funds.
The Dow Jone Industrial Average fell -1008.38 points after Powell’s “Mr T” remarks on pain. That was a whopping -3%. The NASDAQ composite index fell almost -4%.
Equity markets struggled in Europe as well, particularly the German DAX index.
The UMich Buying conditions for houses rose slightly, but remains near the lowest level since 1982.
Clubber Powell, Federal Reserve Chairman.
The Case-Shiller house price numbers are due out Tuesday for June and it is expected that they will show a significant slowing in home prices. Biden and Clubber Powell could then take “credit” for slowing “inflation.”
As The Federal Reserve fights inflation (caused by too much Fed stimulus for too long) and Federal energy policies, we are seeing mortgage rates rising and the housing market decaying.
1-unit (single family detached) housing starts dropped -18.5% YoY in July as mortgage rates rose in 2022. Note the impact of the Covid stimulus (green line) and the resulting surge in housing starts in April 2021, but housing starts have decayed as M2 Money growth slows.
5+ unit (apartment) starts were down -10% MoM in July, but at least permits for apartments rose +2.51% MoM.
Well, we at least know why the NAHB Homebuilder index sucked wind so badly yesterday.
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