Housing Starts Surge Due To Rental Housing Construction, Permits Miss Even With Seasonal Distortion

On the surface, today's Housing Data was good. Yes, there was a miss in the housing permits number, which declined from a downward revised 939K to 902K, on expectations of a strong 942K print, but let's ignore that: after all bad news is good news (although as the chart below shows even this number was highly skewed due to seasonal adjustments and the NSA number hasn't really budged in the past year). But look at the housing starts: what a whopper: at 1036K, this was the highest print since June 2008 - great news, right? Not really, because the one key indicator here, single-family units, actually posted a sizable drop from 650K in February to 619K in March. The offset: construction starts of multi-family, aka rental units, which in March was a whopping 392K, a 83K seasonally adjusted surge from February, which brings the total multifamily starts to the highest since January 2006 at 423K. Of course, in January 2006, single-family units hit a record 1823K, or about three times as much as the March 2013 number. Thank you Fed and QE for making yet another capital allocation mockery as America is increasingly shifting into a nation of renters. At this pace expect multi-family starts to surpass single unit starts in 4-6 months for the first time ever.

Housing Permits seasonal vs non-seasonally adjusted number:



And Housing Starts: note the single vs multi-family divergence:



Source:

Census Dept

Zerihedge

The Federal Housing Administration Is Broke (What Government-Run Entity Isn't...)

SEE, people that can not afford to buy, should be renting instead of lowering lending standards or any other tricks that were used that caused the housing bubble. . Housing starts are just back to historical standards, you can't compare housing starts to 2006 levels. For a number of reasons that was artificial inflated.

SEE, people that can not afford to buy, should be renting instead of lowering lending standards or any other tricks that were used that caused the housing bubble. Originally Posted by WTF

Yet, that is exactly what the administration is doing.

"The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place."

http://www.washingtonpost.com/busine...755_story.html

Well they over reacted to bad credit practice to making it to difficult for people with good to very good credit being able to finance. Let's hope they ease up but not like it was!