Despite homebuilder confidence in the toilet (and Pulte's daily calls alongside Trump for lower rates), US Housing Starts and Permits surprised to the upside in June.

• Housing Starts jumped 4.6% MoM (+3.5% MoM exp), rebounding from May's 9.7% MoM tumble.
• Building Permits rose 0.2% MoM (-0.5% MoM exp), also rebounding from May's 2.0% MoM decline.

Source: Bloomberg

Although in context, this lifts the Starts and Permits SAAR just barely off the lowest levels since the COVID lockdowns...

Source: Bloomberg

A surge in Multi-family unit starts and permits saved the month, while single-family home starts and permits were not pretty...

Source: Bloomberg

But, and it's a big but, there is a big housing problem: US home construction pipeline is hopelessly clogged up, with completions crashing to 3 year low as builders prefer to hold off completing current units rather than go to market now, as they expect even higher prices.  

Cartel behavior to limit supply? Or did the deportation of all those illegals leave the country without anyone who knows how to build a house?

The question we have for the government is simple - if housing construction is crashing, why aren't construction jobs?

Will lower Fed Fund rates do anything to lower mortgage rates? Or will the implied curve steepening further crush affordability? Dear Mr. Trump, be careful what you wish for.

More By This Author: