Following an infrequent upward revision, housing starts fell 14.8 percent. Ignoring revisions housing starts still would have declined 8.8 percent. It’s a bad start to 2024.

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Housing starts from Commerce Department, chart by Mish.

Housing starts dropped 14.8 percent in January according to the Census Bureau’s New Residential Construction Report.

Building Permits

• Privately‐owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,470,000.
• This is 1.5 percent below the revised December rate of 1,493,000, but is 8.6 percent above the January 2023 rate of 1,354,000.
• Single‐family authorizations in January were at a rate of 1,015,000; this is 1.6 percent above the revised December figure of 999,000.
• Authorizations of units in buildings with five units or more were at a rate of 405,000 in January.

Housing Starts

• Privately‐owned housing starts in January were at a seasonally adjusted annual rate of 1,331,000.
• This is 14.8 percent (±10.2 percent) below the revised December estimate of 1,562,000 and is 0.7 percent (±11.7 percent) below the January 2023 rate of 1,340,000.
• Single‐family housing starts in January were at a rate of 1,004,000; this is 4.7 percent (±11.6 percent) below the revised December figure of 1,054,000.
• The January rate for units in buildings with five units or more was 314,000.

Housing Completions

• Privately‐owned housing completions in January were at a seasonally adjusted annual rate of 1,416,000.
• This is 8.1 percent (±10.0 percent) below the revised December estimate of 1,541,000, but is 2.8 percent (±14.6 percent) above the January 2023 rate of 1,377,000.
• Single‐family housing completions in January were at a rate of 857,000; this is 16.3 percent (±7.9 percent) below the revised December rate of 1,024,000.
• The January rate for units in buildings with five units or more was 538,000.

Margins of Error

Note the margins of errors on starts (±11.7 percent) and completions (±14.6 percent).

The Census Department has little faith in the numbers and neither do I.

Housing Starts 1959-Present

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Housing starts are well below where they were in 1959.

The average since 1959 is 1,483. So starts are 10.2 percent below the long-term average.

We are nearly smack in the middle of immense swings.

Housing Starts Single Family vs Multi-Family

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Existing Home Sales

Existing home sales fell for the 20th time in 23 months to a level last seen in 2010. Annual sales are at the lowest total since 1995.

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National Association of Realtors data via the St. Louis Fed.

For discussion, please see Existing Home Sales Drop to Lowest Full Year Total Since 1995

NAR Chief Economist (Cheerleader)

“The latest month’s sales look to be the bottom before inevitably turning higher in the new year,” said NAR Chief Economist Lawrence Yun. “Mortgage rates are meaningfully lower compared to just two months ago, and more inventory is expected to appear on the market in upcoming months.”

My Opinion

Never a worse time to buy.

Mortgage rates are down from 7.9 percent to 7.14 percent. But the median price is the highest ever. Until we see a combination of lower price and lower mortgage rates, home sales are headed nowhere even if they have bottomed.

Whereas the overall consensus thought there would be a recession last year, almost no one thinks so now. If we head into recession, the bottom is not in.

Too many people are stretching to buy a house, needing a huge percentage of their annual income to do so. To maintain standards of living, credit card use is soaring.

Tapped Out Consumers? Retail Sales Unexpectedly Take a Big Dive

Retail sales took a big dive in January, down 0.8 percent. Negative revisions took away another 0.2 percent in December.

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Advance retail sales from Commerce Department, chart by Mish

For discussion, please see Tapped Out Consumers? Retail Sales Unexpectedly Take a Big Dive

2024 is off to a very bad start.

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