In housing construction, the last domino still refuses to fall: Travelin’ Man edition – by New Deal democrat [First, a blogging note: I will be traveling for the next week and a half. I’ll keep posting the data, but the posts are likely to be brief, and may be a day late. On days when there is no data, I will probably not post at all.] When it comes to housing construction, I’ve been waiting for the last domino to fall. Once again in July, it didn’t. Total housing starts rose 3.9%, but are -19% below their peak. Permits rose 0.1%, but are 22% below their peak. Units under construction, which is the “real” economic activity, rose 0.4% and is slightly, as in -2.7%, off its peak: Single family permits are the most leading and least noisy
Topics:
NewDealdemocrat considers the following as important: Hot Topics, housing construction, July 2023, New Deal Democrat, US EConomics
This could be interesting, too:
Angry Bear writes Average real wages rise for 12 straight months as prices decelerate faster than nominal wage growth
Angry Bear writes US Affordable Rental Housing, Makes Sense? Or Not Working as Intended
NewDealdemocrat writes Real wages, payrolls, and consumption vs. employment, and their forecast implications: April update
Joel Eissenberg writes Tax the rich!
In housing construction, the last domino still refuses to fall: Travelin’ Man edition
– by New Deal democrat
[First, a blogging note: I will be traveling for the next week and a half. I’ll keep posting the data, but the posts are likely to be brief, and may be a day late. On days when there is no data, I will probably not post at all.]
When it comes to housing construction, I’ve been waiting for the last domino to fall. Once again in July, it didn’t.
Total housing starts rose 3.9%, but are -19% below their peak. Permits rose 0.1%, but are 22% below their peak. Units under construction, which is the “real” economic activity, rose 0.4% and is slightly, as in -2.7%, off its peak:
Single family permits are the most leading and least noisy data point. They were essentially flat, and both starts and permits are off about -25% from their respective peaks. Single family units under construction declined all of 5,000, and are -18.4% below their peak:
With the huge increase in the prices of houses after the pandemic, action shifted to multi-family units. Permits and starts for these were virtually unchanged last month. While permits are down -33% and starts are down -25% from their respective peaks, multi-family units under construction made yet another new all-time high:
The pace of construction for these multi-family units has barely slowed down at all:
Historically you have needed about a -10% decline in housing under construction before a recession actually began. Once again in July, the final domino – multi-family units under construction – did not fall. I suspect no recession will begun until it does.