Housing Starts & Permits Plunge To Weakest Since COVID Lockdowns

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.