{"id":1810,"date":"2020-08-18T11:01:18","date_gmt":"2020-08-18T15:01:18","guid":{"rendered":"https:\/\/naroffeconomics.com\/?p=1810"},"modified":"2020-08-18T11:01:18","modified_gmt":"2020-08-18T15:01:18","slug":"july-housing-starts-and-permits-2","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1810","title":{"rendered":"July Housing Starts and Permits"},"content":{"rendered":"\n

KEY DATA:<\/u><\/strong> Starts: +22.6%; 1-Family: +8.2%; Multi-Family: +58.4%; Permits: +18.8%; 1-Family: +17%; Multi-Family: +22.5% <\/p>\n\n\n\n

IN A NUTSHELL:<\/u><\/strong> \u201cWhen it comes to housing, the recession is well in the rear view mirror.\u201d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT MEANS:<\/u><\/strong>\u00a0\u00a0Another housing report, another sign that this sector is leading the way back toward a more normal economy.\u00a0\u00a0Actually, there is nothing \u201cnormal\u201d about the housing sector.\u00a0\u00a0Instead, we are talking boom times.\u00a0\u00a0Housing starts soared in July, led by an enormous rise in multi-family construction.<\/em><\/strong>\u00a0\u00a0This segment tends to have large ups and downs, but a nearly sixty percent jump is well beyond large.\u00a0\u00a0Thus, don\u2019t be surprise if there is a drop in multi-family starts in the August or September numbers.\u00a0\u00a0That would not be a sign of weakness.\u00a0\u00a0As for the key single-family segment, it is strong as well, just not out of control.\u00a0For the first seven months of this year, total housing starts are up nearly five percent compared to the same period in 2019.<\/em><\/strong>\u00a0\u00a0Given everything that has happened, that is amazing.\u00a0\u00a0Regionally, there were increases in excess of thirty percent in both the Northeast and the South, while the Midwest and West posted gains in the six percent range.\u00a0\u00a0Looking forward, permit requests skyrocketed as well, with both the single-family and multi-family segments posted robust gains.\u00a0\u00a0Over the past three months, permits have exceeded starts by nearly six percent, indicating that the sector has more room to grow.<\/em><\/strong><\/p>\n\n\n\n

IMPLICATIONS:The reopening of the economy may not be going smoothly everywhere, but it is going incredibly well in the housing sector.<\/em><\/strong>\u00a0Low rates and, at least to some extent the desire to live in less dense locations, have helped drive up demand and home construction is growing to meet that demand.\u00a0\u00a0Since banks don\u2019t usually consider most people on unemployment to be good borrowing risks,\u00a0the mess in Washington over another stimulus bill may not have nearly as big an impact on housing as it might on consumer goods and services spending<\/em><\/strong>.\u00a0\u00a0And with the Fed in no hurry to raise rates, the housing market has a chance to continue leading the way.<\/em><\/strong>\u00a0\u00a0As for the economy overall, we have to wait until we get not just the August consumer data but more importantly the September ones as well to determine if a lack of stimulus funds made a major difference.\u00a0\u00a0Third quarter growth is likely to be record setting.\u00a0\u00a0The only issue is how big a record is set.\u00a0<\/em><\/strong>\u00a0Housing, by itself could add hugely to growth.\u00a0\u00a0It subtracted about 1.75 percentage points in the second quarter but could twice that in the third, a swing of over five percentage points.\u00a0\u00a0Still,we\u2019ve known for months that third quarter growth was going to be amazing, so we have to start focusing on fourth quarter 2020 and 2021 activity.\u00a0<\/em><\/strong>\u00a0Where we go after the summer is up in the air.\u00a0If Washington does the right thing, 2021 could be really solid.\u00a0\u00a0If not, the recovery could fade. My view is that asking Washington to do the right thing is a bridge too far<\/em><\/strong>, so I am less optimistic than other economists.\u00a0\u00a0But, as the saying goes,\u00a0we shall see<\/em><\/strong>.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: Starts: +22.6%; 1-Family: +8.2%; Multi-Family: +58.4%; Permits: +18.8%; 1-Family: +17%; Multi-Family: +22.5%  IN A NUTSHELL: \u201cWhen it comes to housing, the recession is well in the rear view mirror.\u201d WHAT IT MEANS:\u00a0\u00a0Another housing report, another sign that this sector is leading the way back toward a more normal economy.\u00a0\u00a0Actually, there is nothing \u201cnormal\u201d about the … Continue reading July Housing Starts and Permits<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1810","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1810"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1810\/revisions"}],"predecessor-version":[{"id":1811,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1810\/revisions\/1811"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}