Thursday, August 16, 2018

Housing starts turn negative, while permits remain positive

 - by New Deal democrat

NOTE: I'll have a more comprehensive report up at Seeking Alpha later, and will link to it once it is posted.

This morning's report on housing permits and starts was a mixed bag.

Permits, while below their single family peak in February and their overall peak in March, were higher than last month. Their shorter term trend is neutral while the 12 month trend remains positive.

Starts, on the other hand, were lower YoY for the second month in a row. Single family starts had their lowest month since last December.

The data isn't up on FRED yet, so here is the Census Bureau's graph:

Because of their volatility, the best way to view starts is as a 3 month average. But even so viewing, starts made a 7 month low. The last two months are equivalent to the low readings of last summer, and no better than average compared with 2016.

Still, because permits tend to slightly lead starts, and single family permits are the least volatile measure of all, the trend in housing must continue to be counted as a weak positive.

This, by the way, contrasts with the weekly data on purchase mortgage applications, which is now down YoY even as measured over a 4 week average; and is among the lowest readings of the last 18 months.