Housing starts reported a roughly in line report today, which continues the waterfall charts of economic data created by the virus. BC (Before Coronavirus) housing data was excellent as we saw near 40% growth year over year in February. However, like most economic data, housing data did get slammed hard.
From Census: https://www.census.gov/construction/nrc/pdf/newresconst.pdf
Privately-owned housing units authorized by building permits in April were at a seasonally adjusted annual rate of 1,074,000.
This is 20.8 percent (±0.9 percent) below the revised March rate of 1,356,000 and is 19.2 percent (±0.9 percent) below the April 2019 rate of 1,330,000. Single-family authorizations in April were at a rate of 669,000; this is 24.3 percent (±1.6 percent) below the revised March figure of 884,000. Authorizations of units in buildings with five units or more were at a rate of 373,000 in April.
Privately-owned housing starts in April were at a seasonally adjusted annual rate of 891,000. This is 30.2 percent (±11.0 percent) below the revised March estimate of 1,276,000 and is 29.7 percent (±8.1 percent) below the April 2019 rate of
1,267,000. Single-family housing starts in April were at a rate of 650,000; this is 25.4 percent (±9.6 percent) below the revised March figure of 871,000. The April rate for units in buildings with five units or more was 234,000.
Remember one thing, the reason for many years I have said housing starts won’t get to 1,500,000 until years 2020-2024 is still here. Demographics & low rates! The virus can’t kill off those two once we walk the earth freely! New home sales and housing starts just had the weakest recovery ever recorded in history, something that I have stressed in my work for years. However, it’s no longer 2008-2019, its years 2020-2024. Yes, the virus is destroying the U.S. economy, no doubt, but housing has held up better than most sectors for a reason. Yesterday’s HMI data, home builder confidence index rose off a colossal collapse. Housing Starts tend to directionally move with confidence.
From Eye On Housing:
Wait until July of this year to get a better idea of where housing really is. We just had 4 straight weeks of positive purchase application data, and the mortgage rate spike we saw during the mortgage market meltdown has come back down.
More on that topic here in my article for HousingWire:
Can We Still Have A Normal Year In Housing?
From Doug Short:
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.