US 1-Unit Housing Starts Drop -1.72% YoY As Mortgage Rates Soar While Apartment Starts Rise 7.5% MoM (Bullard Says Fed Could Raise Rates By 75 BPS At May Meeting, Japanese Yen To US Dollar Crashes)

Confounded Interest ^ | 04/19/2022 | Anthony B. Sanders

[Browns Ultra Fan]

We have Federal Reserve of St Louis President James “Bully” Bullard saying that The Fed could raise rates by 75 basis points in May, the Japanese Yen to Dollar is crashing as mortgage rates continue to soar.

Here is a nice summary of The Fed’s massive balance sheet expansion in reaction to Covid (orange line) and the resulting soaring of home prices. Then The Fed signals that they will remove the “punchbowl” and mortgage rates have boomed. And not in a good day.

Today we have the US housing starts report. In a nutshell, 1-unit housing starts (single-family detached) declined -4.4% YoY as mortgage rates skyrocket.

5+ unit (aka, apartment stats rose 7.49% MoM in March while 1-unit starts declined by -1.72% MoM. 1-unit permits fell by -4.81% MoM while 5+ units starts rose by 10.89% MoM.

Soaring home prices coupled with soaring mortgage rates equals … apartment living.

Now you to can lease an apartment next to Patrick Bateman from “American Psycho.” And listen to Huey Lewis and The News through the paper-thin walls.

[Browns Ultra Fan]

And live in an apartment with the millions of illegal streaming across the border thanks to Dementia Joe, Insider-trading Nancy and Chuck "The Shmuck" Schumer. Along with our worthless RINO leaders like Mitch "The Cocaine Turtle" McConnell.

[woodbutcher1963]

Multi family starts are going to continue to go up in relation to single family starts. The increase in interest rates is going to make single family home ownership out of reach for many people until later in life, if at all.

The average existing home in many places in the country is between $400K-$500K. So, unless you have owned a home, like me, for 30 years, you can not afford the down payment or the monthly mortgage payment.
Therefore, many people will have to rent OR buy a condo/townhouse/apartment.

This is why Blackrock and others have been buying up apartment complexes and single family homes all around the USA. Especially, in the growth areas of the southern and SW US.

[RainMan]

Very poor analysis on the writer’s part. The graphic on 1-unit Housing Starts YoY shows the March reporting period is ALWAYS a drop from the December reporting period, and June is always a strong rebound from March. Last Year March dropped the index to near zero, in 2020, the MoM drop was over 20%. In short, it’s March, so housing starts drop because nobody buys new homes that come to market in December.

[BiglyCommentary]

This writers is mainly interested in click bait hair on fire headlines. Recently they were screeching “Nasdaq down 300!” but made no mention that was just unwinding a spike up of 300 from the previous day so yawn...

[woodbutcher1963]

Starts: 1.793 Million + 0.3% Highest since 2006

Permits: 1.873 Million +0.4%

Both were predicted to be lower.

Note: Single Family permits down 4.8%

KEEP IN MIND:
In 2004 the US did 2.4 million housing starts. This was the all time high.
In January 2008 we got down to 480,000 total.

Most economists state we need to build 1.5 million starts yearly just to keep up with the need for a population of 330 million people. Houses(apts/condos/single family) on average last 75 years. They get destroyed by fires, floods, earthquakes, neglect(Detroit), etc.

[9YearLurker]

Send just a third of the 30-million-plus illegals home and housing will drop while wages increase.

[babble-on]

Need so many more apartment units here in Nashville. It’s insane what has happened to rental prices.

[woodbutcher1963]

I stayed in the brand new JW Marriott three Octobers ago. It is right next door to the Country Music Hall of Fame. It is the one with the cantilevered bar up on the top floor that faces the Bat man building. It had just opened a couple months before.

I think I counted 15 construction cranes I could see from my hotel room when I was there.
They have rebuilt pretty much all of downtown Nashville in the last ten years.

It has become the east coast Vegas. Millions go there for weekend trips now.

[Gay State Conservative]

later

[babble-on]

We were not ready in any way for the pace of population growth. We have no transit system at all, only automobiles, and downtown is still adding hundreds of thousands of square feet of office space. There’s no place for those workers to live, and no way to get them back and forth in any efficient way.

[KarlInOhio]

the Japanese Yen to Dollar is crashing

I looked at the chart and the dollar has gone from 119 yen to 128 in the past month, which says foreign investors like the dollar with new higher interest rates. "Crashing" is clickbait panic which the article didn't mention past the headline.