Housing Starts/Building Permits Sleight of Hand
The moon-shot in June Housing Starts and Buildings Permits falls to earth rather quickly. Commerce reports Permits in the Northeast at 237,000 for June. The average number of Northeast Permits over the past 12 months is 132,250 on a seasonally adjusted basis, so these data are astounding at best and misleading at worst.
Indeed, the Northeast number accounts for more than 25% of all permits reported in June. On a seasonally adjusted basis, permits increased 11.6%, but if the Northeast is excluded from the data, they were up only 0.7%.
Housing Starts are “ratio adjusted” to the permits, so a rise in permits has a direct affect on Starts. On a seasonally adjusted basis the Northeast had 126k starts, a 52.9% y-o-y increase, the highest level since 1997 - sort of.
The June Housing Starts and Building Permits data are skewed by Permits, which are skewed by a change in NY City permitting law and by seasonal factors. There should be no expectation that the housing market is on the mend.