US Housing Starts/Permits Ugly In April After Huge Revisions

Despite a plunge in sentiment and soaring mortgage rates, analysts expected Starts and Permits to increase in April.

They were half right, but both missed bigly – as Starts rose 5.7% MoM (below the +7.6% exp), up from a downwardly revised 16.8% plunge in March; Permits dropped 3.0% MoM (well below the +0.9% exp), but better than the downwardly revised 5.0% drop in March.

Source: Bloomberg

The downward revision for March meant it saw the largest MoM drop since COVID lockdowns.

Single- and Multi-Family Permits both dropped in April (-0.8% and -9.1% respectively) while Rental Unit Starts surged 31.4% MoM…

Source: Bloomberg

The Multifamily start jump was off COVID lockdown lows…

Single family permits down to 976K SAAR from 984K and the lowest since August

Multifamily permits down to 408K SAAR from 449K and the lowest since Oct 2020

Finally, just what will homebuilders do now that expectations for 2024 rate-cuts have collapsed?

Source: Bloomberg

The number of completed single-family homes climbed to a 1.09 million annualized rate, the most since November 2022. That may explain the softer advance in new groundbreaking activity… but construction employment is at record highs?

Source: Bloomberg

One thing is for sure, a surge in mortgage rates back above 7% chilled homebuilder sentiment dramatically…

Source: Bloomberg

Is Powell trying to engineer a slow motion crash in housing to lower OER and this CPI?