Tuesday , November 5 2024
Home / The Angry Bear / May housing permits and starts continue down from recent peak

May housing permits and starts continue down from recent peak

Summary:
May housing permits and starts continue down from recent peak In May housing permits (blue in the graph below), including the least volatile single-family permits (red, right scale), continued to decline from their January peak. Meanwhile, the more volatile and slightly lagging housing starts (green) increased, but remained below their March peak: The level of construction activity as high as or higher than its pre-pandemic peak is continuing. On the other hand, with a 10% decline in permits, and 9% in starts, the minimum decline to be consistent with a possible upcoming recession has nearly been met (while a 20% decline is more typical). For now, I interpret this to mean a sign of a slowing down of economic growth next year. Finally,

Topics:
NewDealdemocrat considers the following as important: , ,

This could be interesting, too:

NewDealdemocrat writes Real GDP for Q3 nicely positive, but long leading components mediocre to negative for the second quarter in a row

Joel Eissenberg writes Healthcare and the 2024 presidential election

NewDealdemocrat writes JOLTS report for September shows continued deceleration in almost all metrics, now close to a cause for concern

NewDealdemocrat writes Repeat home sales accelerate slightly monthly, but continue to show YoY deceleration

May housing permits and starts continue down from recent peak

In May housing permits (blue in the graph below), including the least volatile single-family permits (red, right scale), continued to decline from their January peak. Meanwhile, the more volatile and slightly lagging housing starts (green) increased, but remained below their March peak:

May housing permits and starts continue down from recent peak

The level of construction activity as high as or higher than its pre-pandemic peak is continuing. On the other hand, with a 10% decline in permits, and 9% in starts, the minimum decline to be consistent with a possible upcoming recession has nearly been met (while a 20% decline is more typical). For now, I interpret this to mean a sign of a slowing down of economic growth next year.


Finally, here is the YoY change in mortgage rates (red), inverted so that up = economic positive, and down = economic negative, compared with total permits (blue)/10 for scale:

May housing permits and starts continue down from recent peak

As I have said many times before, mortgage rates lead permits and starts. The artifact of comparisons with the pandemic lockdown months will end next month, at which time I expect permits to be much more in line with their historical relationship with interest rates than they have been in the past few months.

Leave a Reply

Your email address will not be published. Required fields are marked *