Building Permits Plummet But Housing Starts Jump in August

A mixed month for housing construction as building permits fell double-digits while housing starts were up double-digits , according to the Census Bureau’s New Residential Construction report.

Building Permits. Privately‐owned housing units authorized by building permits fell 10% in August to a seasonally adjusted annual rate of 1,517M. This is down 14.4% from the same time last year and is much lower than economist predictions of a 4.2% drop.

  • Single-family authorizations were down 3.5% from the previous month.

Housing Starts. Privately‐owned housing starts jumped 12.2% in August to a seasonally adjusted annual rate of 1.575M. This is, however, down 0.1% from the same time last year and is much higher than economist predictions of a flat month.

  • Single-family housing starts were up 3.4% from the previous month.

Housing Completions. Privately‐owned housing completions fell 5.4% in August to a seasonally adjusted annual rate of 1.342M. This is, however, 3.1% above the same time last year.

  • Single-family housing completions were up 0.4% from the previous month.

Housing Recession. In August, as the homebuilder confidence fell under 50, NAHB Chief Economist Robert Dietz said in a statement that “Tighter monetary policy from the Federal Reserve and persistently elevated construction costs have brought on a housing recession.”

BOTTOM LINE: Since starts and completions tend to lag current conditions. With homebuilder confidence down along with permits, I think a housing recession is pretty much confirmed.