Morning Report: Housing starts jump

Vital Statistics:

S&P futures4,1697.4
Oil (WTI)63.52-0.04
10 year government bond yield 1.58%
30 year fixed rate mortgage 3.16%

Stocks are higher this morning on strong economic numbers out of China. Bonds and MBS are up.

Housing starts jumped 19% MOM and 34% YOY to a seasonally-adjusted annual rate of 1.74 million units. This is certainly a good number, however remember the base case issue – in March of 2020, the economy was shut down, and in February we had a lot of bad weather. Still, it is an encouraging number. In the grand scheme of things, 1.7 million is not that huge of a number; in fact it is just about average.

Note that chart goes back to the 1950s, and the US population has increased substantially since then. If you take the series and divide it by the US population, you get a sense of how much the US has underbuilt over the past decade.

Building Permits rose 30% YOY to 1.72 million. On a month-over-month basis, they rose 2.7%.

As the starts divided by population chart shows, the US needs a lot of housing immediately. Existing home sales data shows a dearth of inventory, and home price appreciation is soaring. In the fourth quarter, just about every homebuilder was reporting fat gross margins, so the builders have every incentive to build, especially since work-from-home has made the exurbs more attractive. The exurbs, with cheaper land will attack some of the affordability issue. Housing will finally do some of the heavy lifting for US economic growth.

Congress is also introducing a bill to encourage more building near transit stops. My guess is this is primarily a messaging bill since local communities really call the shots with zoning and environmental statements, etc. With all of the headaches of building in the cities, with workers heading outwards, along with eviction moratoriums, I can’t see developers getting too excited about this, but you never know.

The Biden Admin is planning a first-time homebuyer bill. It would provide $25,000 cash, usable at closing, for certain first-time homebuyers. It would be available only to first-generation and economically disadvantaged homebuyers. It will be means-tested and will be available only to people who make less than 120% of area median income, and their parents could not have owned a home in the past 3 years (although if the parents lost their home in a foreclosure or short sale, it won’t apply). The base-case grant is $20k, but if you are part of a group that has been “subjected to racial or ethnic prejudice” you get an extra $5k. It sounds like there will be a lot of moving parts here, so it will be interesting to see how much of an impact it really makes.

Consumer Sentiment improved in April, according to the University of Michigan Consumer Sentiment Survey. The improvement was driven more by current economic conditions than it was by future expectations, which is also encouraging.

50 Responses

  1. Another piece from the new guys:

    “Why did Facebook censor the New York Post’s article on BLM founder’s home-buying spree?
    The company claims the article goes against its “community standards.”

    Shant Mesrobian and Zaid Jilani”

    Liked by 1 person

    • “Social media companies, fearful of regulation from the Democrats who were about to take control of the government in Washington, seemed to collude to suppress a story that would’ve reflected poorly on the family of the Democratic candidate for president.”

      Bullshit. Occam’s Razor. Social media companies want Democrats elected because they are Democrats themselves.


      • I actually think Zuckerberg doesn’t want to do content moderation if left to his own devices.

        Liked by 1 person

        • Perhaps, but his employees sure as hell do


        • Which is a big part of the problem. These organizations are filled with people who want to exercise power, be part of the upper rungs of a fuedal class, and decide what is fit material for the peasants to consume.


      • I tend to concur. There may be some concern about regulation and feel the Democrats are more purchasable or more malleable or that the GOP represents a toothless threat. But on the whole they are largely made up of fellow travelers. And even Zuckerberg is persuadable. By his friends, his social circle, his wife, his immediate employees.

        Liked by 1 person

  2. I liked this take:


  3. Oregon’s main newspaper, The Oregonian, notes that a recent victim of a police shooting was white in order to indicate that rioting and protests are not needed.

    I noticed an interesting detail that no one else seems to be talking about. It describes the victim as a “white” man, which it then contrasts with “Black” victims. Is it now style policy that whether or not to capitalize the name of a race depends upon which race you are talking about? WTF?

    edit: Apparently this is just one more victory for the CRT diversity loons.


  4. The shit going on at Dalton, an elite prep school, is something else.

    A recent faculty email chain received enthusiastic support for recommending that we “‘officially’ flag students” who appear “resistant” to the “culture we are trying to establish.”

    When I questioned what form this resistance takes, examples presented by a colleague included “persisting with a colorblind ideology,” “suggesting that we treat everyone with respect,” “a belief in meritocracy,” and “just silence.” In a special assembly in February 2019, our head of school said that the impact of words and images perceived as racist — regardless of intent — is akin to “using a gun or a knife to kill or injure someone.”

    Meaning that “suggesting we treat everyone with respect” is racist and that’s what they are teaching in this retarded school that costs $50k a year.


    • He also talks how he was told he couldn’t assign the reading of a center-right thinking who was also black. Basically because he was not allowed to confuse the students with a black political or philosophical thinker who did not agree with critical race theory—because being exposed to the idea that not all black people subscribe to CRT would “confuse” the students.


    • The way the left runs culture is a perfect blueprint of how they would govern without the guardrails we have.


  5. I wrote this [between the lines] response to a WaPo editorial comment on why we should not “abandon” Afghanistan.
    While it has always been the thought that supporting the Afghan martial forces would lead to standing them up on their own that has not apparently been the case.

    From this distance, and admittedly through a glass darkly, an argument can be made that the NATO presence has enabled the locals to do little for themselves, rather than having encouraged them to “stand up and own their responsibilities”. If there is truth in that, nothing will be more bracing than announcing withdrawal, just long enough in advance to allow the locals to accept their role as the legitimate protectors of their own people.
    Withdrawal was of course a Trump initiative, with which I agreed in theory, and in practice, although coupled with draw down in Germany it did not sit right with me. Now that it has morphed into an agreed NATO policy coupled with redeployment to Germany my support has grown more comfortable.

    Am I missing something here? If the majority of Afghans don’t want the Taliban shouldn’t they be well enough trained and equipped by now to deal with Taliban, with only minimal logistical and arms support from NATO/USA to counter the logistical/arms support from Pakistan for Taliban?


    • “If the majority of Afghans don’t want the Taliban”

      I’m not sure that’s the case.


    • The argument from the right that wants to remain is one of strategic value based more on the countries that Afghanistan borders than Afghanistan itself. But also worry over 9/11.


      • Kev – Ihave read that the US intends to increase our presence in the “Stans”.

        Joe – of course, if the majority want the Taliban the enterprise would be fruitless anyway.

        I think 10K NATOs remain of which 3K are US. The best argument for staying is if that relatively inexpensive andlowrisk level of training and support works to help a popular anti-Taliban force of locals maintain fighting trim.

        I don’t know what are the true facts, frankly, which is why I have hedged every statement I have made about it and asked questions.


  6. Fascinatingly true


  7. Like

  8. Worth a read:

    “Leniency for defendants in Portland clashes could affect Capitol riot cases

    After President Joe Biden’s inauguration, federal prosecutors agreed to probation deals for charges related to last summer’s unrest in Oregon.

    04/14/2021 04:30 AM EDT”


  9. Shouldn’t everyone who agitated or voted for Trump’s 2nd impeachment be demanding Maxine Waters’ expulsion from the House?


    • No. At least not from what I read there. She has always seemed a dumbass and probably crooked as well [wasn’t she the one who built a foundation that gave scholarships to her own family members?]

      If I am right about that she is a Trump analog and should be gone. Probably should have been impeached for that, if she did as I recall. But like Alcee Hastings, who had no business in public office after he was impeached as a federal judge for taking bribes, she will have to die, I suspect.

      It was Eddie Bernice Johnson who pulled the scholarship scam. Waters got investigated at that same time for channeling bailout money to her husband’s bank. Waters was only as bad as Bachmann, apparently.
      Waters is in her 80s.


    • Does Maxine write mean tweets? No? Then no expulsion!!


    • Mark:

      No. At least not from what I read there.

      Why not? How is the case against Trump for incitement different than one against Waters?


      • I think neither she nor Trump were guilty of incitement at a rally. I wrote that here, IIRC.
        It takes an explicit call to violence to be an incitement.

        But then Trump left the entire Capitol exposed for hours and would not take phone calls from Kevin McCarthy, etc. You cannot really be surprised that a lot of Congresscritters were pissed off, and then “connected” the rally, as well, and decided that his inaction was evidence of his motivation.

        If violence results here and Waters does not immediately call it down I will be more sympathetic to your point. She is dumb enough that she might publicly relish or excuse any resulting violence, in which case I will cheerlead for your view.

        Wait for it.


        • Mark:

          If violence results here…

          Violence has already been going on here for literally days.


        • For me, Maxine Waters has already gone far enough. And not just this time. Meaning if I was in her district I wouldn’t vote for her. But apparently, that’s what her constituents want.


      • I don’t think Waters incitement has ever included anything like this: “I know that everyone here will soon be marching over to the Capitol building to peacefully and patriotically make your voices heard.”

        The part that’s considered incitement–other than reciting his objection to the alleged election fraud–was this: “And we fight. We fight like hell. And if you don’t fight like hell, you’re not going to have a country anymore.

        Our exciting adventures and boldest endeavors have not yet begun. My fellow Americans, for our movement, for our children, and for our beloved country.

        And I say this despite all that’s happened. The best is yet to come.

        So we’re going to, we’re going to walk down Pennsylvania Avenue. I love Pennsylvania Avenue. And we’re going to the Capitol, and we’re going to try and give.

        The Democrats are hopeless — they never vote for anything. Not even one vote. But we’re going to try and give our Republicans, the weak ones because the strong ones don’t need any of our help. We’re going to try and give them the kind of pride and boldness that they need to take back our country.

        So let’s walk down Pennsylvania Avenue.

        Compared to Maxine Waters, who said:

        I’m going to fight with all of the people who stand for justice. We’ve got to get justice in this country and we cannot allow these killings to continue.

        We’ve got to stay on the street and we’ve got to get more active, we’ve got to get more confrontational. We’ve got to make sure that they know that we mean business.

        I hope we’re going to get a verdict that will say guilty, guilty, guilty. And if we don’t, we cannot go away.

        Given what happened over the summer, what does “more confrontational” mean in this case?

        Before the Capitol riot, Trump said everyone should be peaceful, and there was no previous example of Trump supporters doing anything close to a riot. Why was he supposed to assume, based on previous history, that him telling them to go protest at Capitol Hill would turn into a riot? He also said nothing about becoming more confrontational. And Waters uses the same “we have to fight” kind of language. But also “more confrontational”, with the history of the summer riots to look back on.

        Fun fact, she did the same sort of think around the Rodney King trial:

        AND she referred to the protests then not as riots but as “an insurrection”. Back when insurrections were good!

        And she said this: “If you see anybody from that Cabinet in a restaurant, in a department store, at a gasoline station, you get out and you create a crowd and you push back on them, and you tell them they’re not welcome anymore, anywhere.”

        And members of the cabinet got harassed accordingly. If it’s not intentional incitement it’s certainly skirting the line.

        Although Trump probably should have known what was likely to happen after that speech he gave. And was taking unnecessary risks in terms of laying the groundwork for bad actors to incite a riot in order to make Trump supporters look like violent insurrectionists, whether or not such a thing happened–that’s still an opening large enough to drive a riot control van through.

        But given the example of last summer AND the example of Trump’s own incitement–which they agree was incitement–I don’t understand how what Maxine Waters is doing can be excused. And if it is, why in the world wouldn’t you also excuse what Trump did?

        Eh, the modern era. It’s just nuts.


        • I would also note, Trump said the election was stolen and that’s why people should protest.

          Maxine Waters is saying the police are trying to murder you, and that’s why you need to “protest”.

          I feel there is a qualitative difference, both in what she’s arguing is the justification for protest and in knowing what those protests will entail, given the previous history.

          That being said I have a hard time imagining Biden would be happy with her here.


        • KW:

          I don’t understand how what Maxine Waters is doing can be excused. And if it is, why in the world wouldn’t you also excuse what Trump did?

          I find it quite fascinating to watch people try to reconcile their obviously contradictory approaches to Trump vs Democrats.

          Liked by 1 person

    • There’s also this:

      “The final state’s votes had been read. Then entered California Rep. Maxine Waters.

      Taking a play from her own book – she objected to the certification of George W. Bush’s 2000 election – Waters admitted that she didn’t have a senator’s signature on her objection.

      “I wish to ask: Is there one United States senator who will join me in this letter of objection?” Waters asked. Through House Speaker Paul Ryan’s chuckle and boos from the rest of the chamber, it was clear that there was not.”

      I think Pelosi squelched it, but if they are going to start considering expelling members of the House who object to Presidential election results, they should probably start with her as she has the longest record of doing it.

      Liked by 1 person

  10. Interesting comments from Legal Insurrection today:

    The American vision of justice has always been based on that process, and not on the particular outcome in any specific case, a view which helped ensure that process for all us, from best to worst, and prioritized process justice over the mob justice.

    In contrast, the mob vision of justice is based entirely on outcome, and process be damned. No judicial or criminal due process can be permitted to interfere with the “justice” demanded by the mob.

    Of course, this is precisely the view of “justice” that led to the infamous lynching of Emmitt Till in 1955 Mississippi, a black 14-year-old, for the purported crime of offending a white woman in a grocery store.

    And this is precisely the mob justice that the militant factions of Black Lives Matter and Antifa want to bring to 2021 America.

    Give us guilty, on all counts, even on counts not actually being argued in this trial, or we burn it all down generally, and target defense witnesses and, by implication, the trial jurors specifically.

    Good luck with that, America.

    There’s more…worth reading it all.

    Liked by 1 person

  11. Oddly, I find myself agreeing with Jake Tapper on this.


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