First, even though housing starts did fall from a month to month level, this housing starts data has some BC (Before Coronavirus) data in it as it still showed year over year growth. Before the small negative revisions, last month’s data showed near 40% year over year growth in housing starts. As you can see below, housing starts data started the year stronger than any other time in the previous expansion. This went along with the best 2 month average for new home sales and a 13 year high in existing home sales data.
From Census: https://www.census.gov/construction/nrc/pdf/newresconst.pdf
Privately‐owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,353,000. This is 6.8 percent (±1.1 percent) below the revised February rate of 1,452,000, but is 5.0 percent (±2.4 percent) above the March 2019 rate of 1,288,000. Single‐family authorizations in March were at a rate of 884,000; this is 12.0 percent (±1.9percent) below the revised February figure of 1,005,000. Authorizations of units in buildings with five units or more were at a
rate of 423,000 in March.
Privately‐owned housing starts in March were at a seasonally adjusted annual rate of 1,216,000. This is 22.3 percent (±12.2 percent) below the revised February estimate of 1,564,000, but is 1.4 percent (±12.7 percent)* above the March 2019 rate of 1,199,000. Single‐family housing starts in March were at a rate of 856,000; this is 17.5 percent (±13.1 percent) below the revised February figure of 1,037,000. The March rate for units in buildings with five units or more was 347,000.
From Doug Short:
Even though residential construction is considered an essential industry, housing starts, and permits have room to fall. It might not have the drastic waterfall looking chart like the HMI data did yesterday.
If monthly supply increases, starts will and permits will fall more noticeably. As we can see below, the most critical housing data line we had in America got a lot better, thus leading to more robust growth in early 2020. The duration of the lockdown is more key than the scale because, as we know the Chaos theory and the butterfly effect is global.
Just remember that we do have some BC data in the next existing home sales report as well. I touched on this with HousingWire this week.
AD (After the Disease) Jobless claims, on the other hand, looks merely horrific. We have had roughly 22,034,000 jobless claims in the last 4 weeks The charts simply speak for themselves.
From Doug Short:
However, remember that jobless claims benefits have been increased, and Americans are getting their $1,200 check on top of higher jobless benefits. Look for more money to be given while our country is in lockdown. We have a lot of work to do as a country to get back out there working again, but one day we will back in the high life of working again.
Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami is a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data daily on his Facebook page https://www.facebook.com/Logan.Mohtashami and is a contributor for HousingWire.