Hoot of the day: The Bloomberg Econoday consensus had housing starts and permits both rising. Several charts show how much they dropped.
Unexpected Disaster
The Commerce Department New Residential Construction report for May 2024 was an unexpected disaster.
The Bloomberg Econoday consensus was for a 1 percent rise in starts and a 0.7 percent rise in permits. Instead, starts fell 5.5 percent on top of negative revisions. Excluding revisions, starts fell 6.1 percent. Permits dropped 3.8 percent.
Why this was unexpected is a mystery other than economists seem to be the most optimistic people on the planet except for politicians speaking about themselves.
Housing Report Details
- Building Permits: Privately‐owned housing units authorized by building permits in May were at a seasonally adjusted annual rate of 1,386,000. This is 3.8 percent below the revised April rate of 1,440,000 and is 9.5 percent below the May 2023 rate of 1,532,000. Single‐family authorizations in May were at a rate of 949,000; this is 2.9 percent below the revised April figure of 977,000. Authorizations of units in buildings with five units or more were at a rate of 382,000 in May.
- Housing Starts: Privately‐owned housing starts in May were at a seasonally adjusted annual rate of 1,277,000. This is 5.5 percent (±9.4 percent) below the revised April estimate of 1,352,000 and is 19.3 percent (±10.0 percent) below the May 2023 rate of 1,583,000. Single‐family housing starts in May were at a rate of 982,000; this is 5.2 percent (±9.9 percent) below the revised April figure of 1,036,000. The May rate for units in buildings with five units or more was 278,000.
- Housing Completions: Privately‐owned housing completions in May were at a seasonally adjusted annual rate of 1,514,000. This is 8.4 percent (±9.8 percent) below the revised April estimate of 1,652,000, but is 1.0 percent (±10.6 percent) above the May 2023 rate of 1,499,000. Single‐family housing completions in May were at a rate of 1,027,000; this is 8.5 percent (±10.1 percent) below the revised April rate of 1,122,000. The May rate for units in buildings with five units or more was 479,000.
Housing Starts Single Family vs Multi-Family
Single Family vs Multi-Family Details
- Housing starts are down 30.1 percent from the April 2022 high to 1,277,000 units (blue highlight). That’s the smallest number since June of 2020 (yellow highlights).
- Single-Family starts are down 19.6 percent from the November 2021 high, but they are up 23.4 percent from the November 2022 low (red highlights).
- Multi-family has crashed (green highlights). Multi-family is down 53.0 percent from the April 2022 high.
Fed rate hikes have clearly taken a toll on housing but it has impacted multi-family construction more.
Where Do We Put 8 Million Illegal Immigrants?
On May 23, I asked Where Do We Put 8 Million Illegal Immigrants?
Millions of immigrants keep pouring in. New residential construction has stalled and multi-family construction is in decline. Completions are rising, but is that enough housing?
One of Every Five New York City Hotels is Now a Migrant Shelter
On June 2, I noted One of Every Five New York City Hotels is Now a Migrant Shelter
New York City hotel prices have never been higher. Illegal immigration is part of the reason why. Mayoral graft is another.
Don’t worry, LA has the affordable housing solution starting with “affordable housing units at $600,000 each to house 278 homeless out of 75,518 in the county.
Please note A New High-Rise Building Will House the LA Homeless in $600,000 Units
If the county were to shelter the 75,518 homeless, the cost would be $45,310,800,000. That’s $45.3 billion, excluding free property taxes, case workers, maintenance, utilities, insurance, food, police, clothes, doormen, or medical care.
And it would not stop there. Every homeless person in the state would move their tent to LA to participate.
This dear woke fans is what’s known as “affordable housing”.
Clearly, the proper solution is to do the same thing for 8 million illegal migrants. After all, free food, free clothes, and free shelter is a right.