Tuesday , July 27 2021
Home / Hale Stewart: Bonddad Blog / May housing permits and starts continue down from recent peak

May housing permits and starts continue down from recent peak

Summary:
- by New Deal democratIn May housing permits (blue in the graph below), including the least volatile single family permits (red, right scale), continued to decline from their January peak. Meanwhile the more volatile and slightly lagging housing starts (green) increased, but remained below their March peak:The level of construction activity as high as or higher than its pre-pandemic peak is continuing. On the other hand, with a 10% decline in permits, and 9% in starts, the minimum decline to be consistent with a possible upcoming recession has nearly been met (while a 20% decline is more typical). For now I interpret this to mean a sign of a slowing down of economic growth next year.Finally, here is the YoY change in mortgage rates (red), inverted so that up = economic positive, and down

Topics:
[email protected] (New Deal democrat) considers the following as important:

This could be interesting, too:

Tyler Durden writes Here’s Why the New COVID Relief Program Will Turn The Working Class Into Serfs…

Tyler Durden writes 59 Million Americans Prohibited From Buying High-End Dell Gaming PCs

Tyler Durden writes Record Coral Cover Of Great Barrier Reef Shames Climate Alarmists, Media

Andrew Mullen writes Canada escalates WTO case against China’s blocks on its canola seed exports

 - by New Deal democrat

In May housing permits (blue in the graph below), including the least volatile single family permits (red, right scale), continued to decline from their January peak. Meanwhile the more volatile and slightly lagging housing starts (green) increased, but remained below their March peak:

May housing permits and starts continue down from recent peak
The level of construction activity as high as or higher than its pre-pandemic peak is continuing. On the other hand, with a 10% decline in permits, and 9% in starts, the minimum decline to be consistent with a possible upcoming recession has nearly been met (while a 20% decline is more typical). For now I interpret this to mean a sign of a slowing down of economic growth next year.

Finally, here is the YoY change in mortgage rates (red), inverted so that up = economic positive, and down = economic negative, compared with total permits (blue)/10 for scale:

May housing permits and starts continue down from recent peak
As I have said many times before, mortgage rates lead permits and starts. The artifact of comparisons with the pandemic lockdown months will end next month, at which time I expect permits to be much more in line with their historical relationship with interest rates than they have been in the past few months.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.