Starts & Permits | The Crawl Continues

Takeaway: New Highs are still new highs, even if they're slightly less impressive than we thought they were a month ago.

Our Hedgeye Housing Compendium table (below) aspires to present the state of the housing market in a visually-friendly format that takes about 30 seconds to consume.


Starts & Permits | The Crawl Continues - Compendium 091715 



Today’s Focus:  August Housing Starts & Permits

Last months hangover in permits following the NY tax exemption pull-forward in May/June was acute.   The Starts data for August released this morning, which saw MF and SF starts in July revised lower by -5.9% and -2.6%, respectively, reflected a more significant flow through to starts activity than originally estimated.


The positive framing to the negative revision is that a post-crisis high in new SF construction activity being negatively revised to a slightly lower post-crisis high is largely inconsequential.    


The same conclusion probably holds for the August data as well.  Single-family permit activity rose to the strongest level since January 2008 and, while starts declined -3.0% MoM to +739K, they remain at current cycle highs and offer some solid justification for the 10-year high in builder confidence recorded in yesterday’s HMI print for September (Note: HERE).  On the multi-family side, Starts dipped -3% while permits rose +4% following last month’s cratering. 


In short, August saw a sequential but unremarkable dip while the positive, albeit crawling, trend of improvement in the New Home market remains ongoing.   


Looking ahead to the Existing Market, we’ll get the EHS data for August on Monday.  Relative softness in PHS in both June and July along with flat-to-down trends in Purchase Applications continue to argue for modest downside risk to reported EHS over the next month or two.



Starts & Permits | The Crawl Continues - Starts Total LT


Starts & Permits | The Crawl Continues - SF Starts TTM


Starts & Permits | The Crawl Continues - SF Starts LT


Starts & Permits | The Crawl Continues - MF Starts TTM


Starts & Permits | The Crawl Continues - MF Starts LT




About Housing Starts & Permits:

The US Census Bureau records the number of new housing units that have obtained permits for construction and those that have begun construction. This data includes new buildings intended primarily as residential units. The US Census Bureau defines a start as, “Start of construction occurs when excavation begins for the footings or foundation of a building.” 




Joshua Steiner, CFA


Christian B. Drake


7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more

Got Process? Zero Hedge Sells Fear, Not Truth

Fear sells. Always has. Look no further than Zero Hedge.

read more