Housing starts like a lot of economic data took a hit when the Covid19 recession started. The housing sector was the hottest in our economy in 2020 before lockdown protocols. It has clearly held up much better than other areas of our economy. So even though today’s housing starts report was a miss on estimates. The permit data did look good enough to create a backdrop for some better data ahead.
Privately-owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,220,000. This is 14.4 percent (±1.1 percent) above the revised April rate of 1,066,000 but is 8.8 percent (±1.0 percent) below the May 2019 rate of 1,338,000. Single-family authorizations in May were at a rate of 745,000; this is 11.9 percent (±1.9 percent) above the revised April figure of 666,000. Authorizations of units in buildings with five units or more were at a rate of 434,000 in May.
Privately-owned housing starts in May were at a seasonally adjusted annual rate of 974,000. This is 4.3 percent (±15.5 percent)* above the revised April estimate of 934,000, but is 23.2 percent (±6.2 percent) below the May 2019 rate of 1,268,000. Single-family housing starts in May were at a rate of 675,000; this is 0.1 percent (±11.9 percent)* above the revised April figure of 674,000. The May rate for units in buildings with five units or more was 291,000.
The recent HMI data from the builders show that they’re for sure more excited about the market place. Of course, this is working from a waterfall collapse.
Purchase application data just hit an 11-year high with 21% growth year over a year today.
AD (After the Disease) data YoY Growth
From Calculated Risk:
Early on in the year, I stressed to put an * on housing data in March, April, and May. I told readers to wait until July 15th and then take a look at all June data to get an excellent base to work from. The Covid19 recession was the most significant short term economic shock we have seen in our lifetime. However, what makes housing in America solid are two things that Covid19 can’t take away. We have the right demographics and low mortgage rates. This runs in line with my theme for many years now that housing was the year 2020-2024 story. We have to be extremely vigilant about this virus, which is still killing and infecting Americans every day. However, for 2020, housing held it’s ground proud.
Logan Mohtashami is a housing data analyst, financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami, now retired, was 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.