Boockvar on Home Construction, Sales
The following is from Peter Boockvar:
Home construction and sales in September
September single family housing starts fell to 859k from 900k and vs 875k in the month before. That’s the least in a year but not surprising considering what we’ve heard from the homebuilders, the affordability challenges the buyer faces and the supply issued builders face.
Multi family starts slowed to 362k from 388k in August and vs 494k in July. This is a very volatile monthly figure but most relevant hearing from the publicly traded multi family REITS, sunbelt construction has slowed dramatically. I do believe though new starts have picked up in the coastal states and apparent in the Tri-State area burbs that I see.
Permits for single family homes fell to 845k and that is the lowest since March 2023. They rose to 555k from 523k for multi family.
With buying a home for a first time interested buyer ever more difficult, I think the excess apartment supply in parts of the country will get further absorbed and in 2027 we’re going to see an inflection up in rents again. Single family starts will remain challenged until income gains catch up to the price increases and/or mortgage rates fall.
And on the supply side, I’ll mention here again what was said in yesterday’s NAHB report: “tight lending conditions and elevated land, labor and construction costs persist” and “Builders also continue to face higher material costs, rising gas and diesel prices and persistent labor shortages. In some markets, builders report that increased immigration enforcement is discouraging legal workers from reporting to job sites.”
Single Family Housing Starts
Multi Family Starts
With regards to pending home sales in September, they plunged by 7.3% m/o/m, well worse than the estimate of down just .5%. It now sits at a fresh low for this data point back about 25 years. The weakness was across all four main regions.
The reason is obvious, “Market conditions weakened in September due to fast-rising mortgage rates” said the NAR. Nothing more to add as we know exactly the challenges being faced in this key part of the US economy.
Pending Home Sales
