(Click on image to enlarge)

Starts, permits, and completions via commerce department, chart by Mish.

Permits

• Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 1,473,000.
• This is 4.4 percent below the revised August rate of 1,541,000 and is 7.2 percent below the September 2022 rate of 1,588,000.
• Single-family authorizations in September were at a rate of 965,000; this is 1.8 percent above the revised August figure of 948,000.
• Authorizations of units in buildings with five units or more were at a rate of 459,000 in September.

Housing Starts

• Privately-owned housing starts in September were at a seasonally adjusted annual rate of 1,358,000.
• This is 7.0 percent (±15.8 percent) above the revised August estimate of 1,269,000, but is 7.2 percent (±12.1 percent) below the September 2022 rate of 1,463,000.
• Single-family housing starts in September were at a rate of 963,000; this is 3.2 percent (±10.8 percent) above the revised August figure of 933,000.
• The September rate for units in buildings with five units or more was 383,000.

Completions

• Privately-owned housing completions in September were at a seasonally adjusted annual rate of 1,453,000.
• This is 6.6 percent (±10.2 percent) above the revised August estimate of 1,363,000 and is 1.0 percent (±13.7 percent) above the September 2022 rate of 1,438,000.
• Single-family housing completions in September were at a rate of 998,000; this is 5.3 percent (±11.2 percent) above the revised August rate of 948,000. The September rate for units in buildings with five units or more was 445,000.

Things Relatively Stable In 2023

• Starts and permits have been relatively stable since November of 2022 (yellow highlight).
• Starts peaked at 1,803,000 in April of 2022, at a seasonally-adjusted annualized rate (SAAR), and are now 1,358,000.
• Permits peaked at 1,948,000 in December of 2021, at a seasonally-adjusted annualized rate (SAAR), and are now 1,473,000.

Expectations and Revisions

The Bloomberg Econoday consensus was 1.39 million starts vs 1.358 million actual.

The Commerce Department revised August starts from 1.283 million to 1.269 million, so this bounce is nowhere near as good as it looks from the headline number.

Negative revisions are the norm in most of the recent housing reports.

Also note the margins of error for starts at (±15.8 percent). This bounce may not have happened at all.

Major Boom-Bust Swings

(Click on image to enlarge)

Housing starts now are about where they were in 1959. They are just over half what they were in in four major boom cycles but well over bust lows.

With mortgage rates at fresh 23-year highs near 8.0 percent, it’s a combination of builder incentives al lack of supply of existing homes that have prevented a deep crash in starts.

Existing-Home Sales Decline 17 of Last 19 Months – Yes, This is a Crash

(Click on image to enlarge)

On September 21, I commented Existing-Home Sales Decline 17 of Last 19 Months – Yes, This is a Crash

Prices have not crashed but transactions have. Crashes are rare, but we are in one now, from a transaction perspective.

People who want to move are effectively trapped in their houses because they do not want to trade a sub-3% mortgage for a 7.0% mortgage [now 8.0 percent].

The bidding wars we do see are from people who are price insensitive. They make for amusing anecdotes but the above chart shows the real picture.

This crash is likely to last longer because intertest rates are likely to stay higher for longer because the Fed fears stoking more inflation.

Housing Units Under Construction

(Click on image to enlarge)

There is still an enormous number of units under construction with single-family completions happening rapidly and multi-family hardly at all.

On October 2, I asked When Will Record Housing Units Under Construction Ease Rent Inflation?

That’s really a trick question. For a better question, remove the lead “when” from the sentence: Will Record Housing Units Under Construction Ease Rent Inflation?

For discussion, please see the above link.

How the Fed Destroyed the Housing Market and Created Inflation in Pictures

Finally, please see my post How the Fed Destroyed the Housing Market and Created Inflation in Pictures for discussion of how the Fed created this dual housing problem of crashing existing sales but rising prices.

More By This Author: