April housing permits and starts: a pullback from peak, but no recessionary signal UPDATED
April housing permits and starts: a pullback from peak, but no recessionary signal UPDATED
The monthly statistics on housing permits and starts, reported this morning, were mixed, as permits increased slightly and starts declined:
The less volatile single-family permits also declined slightly.
On the one hand, a high level of construction activity is continuing. But the three-month moving average of both single-family and total permits, as well as starts, all declined from their highs in the December-January period. To be recessionary, I would need to see at least a 10% decline in total permits; the actual decline from the peak is about 6%, so well within the range of a little pullback during an expansion.
One vital part of your property you should check up on frequently is your roofing. For instance, if there are missing shingles on top of your home, you may need to look for commercial roofing contractors near me to get them replaced. If you notice leaks or damage to your roof, you should hire Roofers Melbourne to assess the situation and provide necessary repairs to prevent further issues.
I’ll have more to say once the data is posted at FRED, probably later today.
UPDATE: Here is the comparison of single family permits (red, right scale) – the least volatile of the measures – with total permits (blue) and starts (green) – which are about twice as volatile as permits and typically lag by a month or so:
The December 2020 – January 2021 peak is evident.
And here is the YoY change in mortgage rates (red), inverted so that up = economic positive, and down = economic negative, compared with total permits (blue)/10 for scale:
As I have said many times before, mortgage rates lead permits and starts. The artifact of comparisons with the pandemic lockdown months will end in June, at which time I expect permits to be only about 5% ahead of summer 2020 (= .5% on the graph).
NDD,
Pandemic frictions in construction?
Last year pool construction permits soared here, but starts failed when construction supplies ran short. This spring pool builders caught up and had the highest number of May spring pool openings ever in the local water hauling business and the month is only 2/3rds over and done. The peak of pool openings here in central VA will be next week for the Memorial Day weekend.
In residential housing here in central VA there is a boom in roofing and replacement windows now. I have only been talking to contractors directly, but we get an unsolicited “offer” to buy our home “as is” almost every week. Our realtor from buying our home has stayed in touch since 2004 and works for Berkshire Hathaway Home Services now. She has been telling us for over a year that it is a seller’s market with an extraordinarily tight inventory. Of course I would have to be fool to want to trade homes now and that is not the case. A lot of the fixer activity is from existing home owners likely to remain in the home that they have. Windows can be an expensive fix to prepare for selling, but an obviously leaking roof can be a show stopper for a sale. Thing is though that after two successive years of record rainfall we are now in a drought. So, maybe this really is the time to sell that house with a leaky roof although a cheap roof does not show as much as cheap windows.