A day after homeBUILDER sentiment finally cracked (though still dramatically more 'confident' than homeBUYERS)...
Source: Bloomberg
...and mortgage rates are rebounding higher, Housing Starts and Building Permits expectations were mixed ahead of this morning's print.
The actual data was NOT mixed with both Starts (-9.8% MoM) and Permits (-2.0% MoM) well below expectations...
Source: Bloomberg
May Housing starts:
single-family up 0.4% to 924K SAAR from 920K
multi-family tumbled 30.4% to 316K SAAR from 454K, lowest since Nov 2024
This is the biggest MoM drop in multi-family unit starts since 2022...
This dragged the SAARs for both Starts and Permits down to their lowest level since the CVID lockdowns...
Source: Bloomberg
This should not be a surprise given the weakness expected from builders for future sales...
Source: Bloomberg
Perhaps the most shocking chart - that explains why builders are not building single-family homes is that inventories of unsold NEW homes is surging...
Source: Bloomberg
Finally, rate-cut expectations are not helping...
Source: Bloomberg
So, don't bank on The Fed to save the day.
