July Housing Starts still reflect aftermath of tax credit

July Housing Starts totaled 546k annualized, 14k less than expected and June was revised down by 12k to 537k. Permits at 565k were also below forecasts of 580k. The gain in starts m/o/m was solely led by multi family as single family starts fell to the lowest level since Apr ’09. Single family permits also fell to the lowest since Apr ’09. The two regions with the highest foreclosure competition to new building, the South and West, saw declines in single family construction while the Northeast and Midwest had modest gains. Housing is still dealing with the aftermath of the pull forward of demand into the Spring due to the tax credit so it will continue to be months before we know what’s real supply/demand and what has been messed with thru government stimulus. Another comment ahead of today’s housing summit, if the average taxpayer is still on the hook for someone else’s mortgage after this GSE revaluation process ends, we’ve learned nothing.

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