If yesterday's plunge in the NAHB sentiment survey is anything to go by, this morning's starts and permits data should be a shitshow.

Expectations were extremely mixed with Starts expected to jump 7.8% MoM after plunging last month and Permits expected to plunge 5.7% after soaring last month (so big reversals).

Permits beat expectations but tumbled 4.4% MoM (-5.7% MoM exp) but Starts missed expectations, rising 'only' 7.0% MoM (+7.8% exp) worsened still by a downward revision for August from -11.3% to -12.5% MoM...

Source: Bloomberg

This data reverses the recent trend in SAAR (but Starts remain weak)...

Source: Bloomberg

Under the hood, multi-family rental permits plunged by the most since Nov 2022 while single-family permits rose for the 9th straight month. Multi-family unit starts rose by the most since Aug 2022...

Source: Bloomberg

For context, Sept multi-fam permits down 14% to 459K from 534K, lowest since Oct 2020, but Sept single-fam permits rose 1.8% to 965K from 948K, highest since May 2020

And Rental Starts bounced from 3 year lows.

Given the NAHB sentiment, it would appear build permits are set to keep falling...

Source: Bloomberg

So, why is construction employment still holding near its highs...

Will The Fed be pleased to see permits going down? Their hawkishness is driving homebuilders to produce less inventory? That will not help 'prices' and 'affordability'...

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