Housing Slowly Rolling Over: June Permits Down 6.1%, Starts Down 0.9%

-edited

Today's new residential construction report spotlights a housing sector that is slowly rolling over.

The New Residential Construction report for June isn't all bad news, just mostly bad news. Permits lead the downside.

Building Permits

Privately‐owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,220,000. This is 6.1 percent below the revised May rate of 1,299,000 and is 6.6 percent below the June 2018 rate of 1,306,000. Single‐family authorizations in June were at a rate of 813,000; this is 0.4 percent above the revised May figure of 810,000. Authorizations of units in buildings with five units or more were at a rate of 360,000 in June.

Housing Starts

Privately‐owned housing starts in June were at a seasonally adjusted annual rate of 1,253,000. This is 0.9 percent below the revised May estimate of 1,265,000, but is 6.2 percent above the June 2018 rate of 1,180,000. Single‐family housing starts in June were at a rate of 847,000; this is 3.5 percent above the revised May figure of 818,000. The June rate for units in buildings with five units or more was 396,000.

Housing Completions

Privately‐owned housing completions in June were at a seasonally adjusted annual rate of 1,161,000. This is 4.8 percent below the revised May estimate of 1,220,000 and is 3.7 percent below the June 2018 rate of 1,205,000. Single‐family housing completions in June were at a rate of 870,000; this is 1.8 percent below the revised May rate of 886,000. The June rate for units in buildings with five units or more was 283,000.

Bond Yields

Bond yield declined across the board on the news.

  • The 10-year yield fell 4.7 basis points to 2.073%.
  • The 30-Year yield fell 4.3 basis points to 2.589%
  • The 5-year yield fell 4.4 basis points to 1.840%
  • The 3-month yield fell 2.5 basis points to 2.134%

Not All Bad

The housing report wasn't entirely awful.

Single-family permits rose a fraction. Single-family starts rose 3.5% but from negative revisions.

Details, however, are not very encouraging.

Single Family Starts and Permits

Single-family starts are down 4.7% compared to a year ago.

Historically, single-family starts and permits are dismal.

Housing Slowly Rolling Over

The housing sector is slowly rolling over.

Despite lower interest rates, homes are not affordable and attitudes towards the ownership society have changed.

Mike "Mish" Shedlock

Comments (10)
No. 1-4
ElPendejoGrande
ElPendejoGrande

People are starting to figure out that 'homeownership' now means 'bankownsyouership'.

mkestrel
mkestrel

Looks like housing bubble 2.0 is rolling over

jivefive99
jivefive99

Ever wanted to be able to tell the future? Just master the past. We knew for years that there was going to be a housing bubble, just as we knew there would be an echo bubble/boomlet/2nd bubble. Being smart is not so hard. :)

JG1170
JG1170

Looks like today we are at around the late-2006 to early-2007 point. The cascade, while surely not as overwhelming as last time, could happen faster this time as a lot of people will recall that they have seen this movie before and will want to skip right to the end. I live in LA and meet a lot of new people all the time. Nobody has any money in LA except those higher up in the entertainment industry or those whose income is in some way related to Real Estate appreciation. I don't hear them being so vociferous these days.