Housing Starts Collapsed In January – Biggest MoM Decline Since COVID Lockdowns

After single-family home starts plunged in December, analysts did not expect much of a bounce back in January as rates remain high and some regions were affected by weather.

Analysts were way off. Housing Starts puked 14.8% MoM in January (vs unchanged exp), but December’s 4.3% MoM decline was revised up to a 3.3% MoM rise. Building Permits also tumbled, down 1.5% MoM (vs +1.3% exp) and well down from the +1.8% MoM in December…

Source: Bloomberg

This pushed the Housing Starts SAAR back near post-COVID lows…

Source: Bloomberg

DO NOT BLAME THE WEATHER! It’s January – we know there are weather issues and that should be more than ‘priced-in’ on a seasonal adjustment basis.

Multi-family permits cratered to their lowest since Oct 2020. Permits for one-family homes edged higher after rising consistently throughout 2023

And multi-family starts were even worse, plunging from 489k SAAR to 314k SAAR – the lowest since May 2020 (when the economy was closed)…

The government’s report showed housing starts fell in all four of the nation’s regions, led by the Midwest and Northeast. The number of single-family homes completed plunged to the lowest level since May 2020.

They built it, but no one came… the inventory of new houses for sale remains elevated and suggests builders may be cautious about beginning new projects.

Don’t expect Permits to be reaccelerating anytime soon as mortgage rates have started to rise once again…

Source: Bloomberg

Which is not good news for CPI either as it suggests there is little rent relief coming soon.

And finally, there is a record gap between what the government tells us about construction employment and actual construction activity…

Makes you wonder, eh? Did builders all suddenly get massively less productive? Or is the BLS just making shit up as usual?