Morning Report: Housing starts disappoint

Vital Statistics:

  Last Change
S&P futures 4,687 -8.2
Oil (WTI) 79.82 -0.93
10 year government bond yield   1.63%
30 year fixed rate mortgage   3.27%

Stocks are lower as investors fret about inflation. Bonds and MBS are down.


Housing starts disappointed again, coming in at 1.52 million. Building Permits were a bit better, rising to 1.65 million. Given the shortage of housing in the US, these numbers should be north of 2 million. This has been going on for years, so it cannot be blamed on the supply chain shortages of the past two years.

Housing starts are stuck around the average level since 1959. When you consider that the US population has risen 85% since then you can see the issue. Below is a chart of housing starts divided by population.

According to the National Association of Realtors, we have a shortage of about 5 million units. That is 3 years of housing starts alone.


Separately, homebuilders sentiment rose 3 points, according to the NAHB / Wells Fargo housing index. “The solid market for home building continued in November despite ongoing supply-side challenges,” said NAHB Chairman Chuck Fowke. “Lack of resale inventory combined with strong consumer demand continues to boost single-family home building. In addition to well publicized concerns over building materials and the national supply chain, labor and building lot access are key constraints for housing supply,” said NAHB Chief Economist Robert Dietz. “Lot availability is at multi-decade lows and the construction industry currently has more than 330,000 open positions.”


Mortgage Applications fell by 3% last week as purchases increased by 2% and refis fell by 5%. “Refinance applications decreased for the seventh time in eight weeks, as mortgage rates moved higher after two weeks of declines.” said Joel Kan, MBA Associate Vice President of Economic and Industry Forecasting. “Activity has been particularly sensitive to rate movements, and last week’s decline was driven by a drop in conventional and FHA refinance applications, which offset an increase in VA refinance applications. All mortgage rates in MBA’s survey increased, with the 30-year fixed rate climbing to 3.2 percent.”

17 Responses

  1. This was good:

    Some have read Shor’s argument as “move to the center”. That’s not really it; Shor gives the thumbs-up to left-ish policies like taxing the wealthy and letting the government negotiate prescription drug prices (and FWIW, Shor identifies as a socialist). An even less accurate reading of Shor’s argument is that Democrats should abandon the preferences of voters of color — here’s Elie Mystal writing in The Nation:

    “…a chorus of powerful Democrats has risen up inside the Beltway to tell Democrats that abandoning Black people—the very people who put them in power in the first place—and making performative efforts to win the support of racists, is the only way to stay in power.”

    That’s an astounding mischaracterization of Shor’s argument. Mystal is actually responding to something close to the opposite of Shor’s argument. It’s as if he described Seabiscuit as “a movie about a talking pig who learns the true meaning of Christmas.” How the fuck did you get that from Seabiscuit?


    • And this:

      The key point here is that educated-left weirdness is an overwhelmingly white phenomenon. Shor makes it clear that the policies he deems “popular” more accurately reflect the preferences of nonwhite Democrats than white Democrats. On one key point of contention — the “defund the police” talking point — a new poll shows us, again, what polls have been showing for at least a year: More Black people want more police funding than less. On a more macro level, a 2017 study on American political identities found that the “progressive activist” group — the furthest left of the seven groups they identified — was also the second-whitest. It was 80 percent white. It was exactly as white as the Backstreet Boys.


    • Of course, right wing media have been on a mission to destroy the Democratic brand since the ‘90s. Fox News and talk radio run the same play over and over: They find the dumbest left-winger in America and make sure that moron gets maximum air time.This creates a huge structural disadvantage for Democrats. Obviously, the left has our own garbage-y, partisan media sources — and also Twitter — but it’s nothing like the maximally-efficient bullshit factory that exists on the right.

      The left has Hollywood, almost every newspaper, every news network save one, academia, the Administrative state, the search engines, social media, and corporate HR departments.

      And they still think they are the underdogs. It is amazing how oblivious the left is to its own hegemony.


      • What surprises me is the guy does not seem clueless but he doesn’t even acknowledge, while saying that, that most people on the right have the opposite view. Which suggests to me the truth is at least a little bit more in the middle than he acknowledges.



    I think Greg’s finally realized he’s got a problem on his left flank.


    • He desperately needs an editor though.

      “We just caught another glimpse of these possibilities in Virginia, where members of a local school board drew national attention by suggesting burning books that they deemed culturally heretical. Parents have now revolted against an effort to ban such books, and the board nixed the ban.”

      Banning is not the same thing as burning.

      “Right-wing overreach presents opportunities for liberals to get this right, by balancing the calling out of illiberal woke excess with persecuting the case against cynical right-wing white-grievance-mongering.”

      I presume he means prosecuting, but could have been a Freudian slip.

      He sounds a lot like the “Blue Wall” guy too with the hypotheticals that have no actual application to the real world:

      Never go full A101.

      It does look like payback will be a bitch in the House if the Republicans take over in 2022.


      • Also, was there a proposed ban, per se? I thought the kerfuffle was about parents being made aware of sexually explicit or adult material used specifically in teaching. It wasn’t about banning or burning books–or so I thought.

        Something profoundly unexpected is going to have to happen for the Republicans not to take back the house in 2022. IMO.

        I’m typically bad at predicting election outcomes but I’m betting I’m right on this one. Like I said: unless there are some profound changes in the next year, all in a positive direction.


      • That messianic right-wing fervor creates an opening to capture a middle ground. But what should this middle ground look like?

        Yeah. I think he’s fantasizing here. I’m not seeing the Dems being in any position to capture the middle ground. That was what Biden was for and he’s certain burned that bridge.


  3. A mea culpa worth noting:

    “What this indictment further exposes is that James Comey’s F.B.I. became a Bureau of Dirty Tricks, mitigated only by its own incompetence — like a mash-up of Inspector Javert and Inspector Clouseau. Donald Trump’s best move as president (about which I was dead wrong at the time) may have been to fire him.”


    • jnc:

      A mea culpa worth noting:

      Better late than never, I suppose. But it hardly recommends him as a pundit that it’s taken him this long to discover what was obvious 4 years ago.


      • Compared to the rest who are now claiming that the Steele Dossier doesn’t matter when it comes to Trump and Russia, he’s a paragon of integrity.

        Especially for anyone associated with the New York Times.


        • jnc:

          Compared to the rest who are now claiming that the Steele Dossier doesn’t matter when it comes to Trump and Russia, he’s a paragon of integrity.

          Fair enough. I suppose it is a little surprising that he hasn’t yet been kicked off the op-ed pages for it.


  4. So, it looks like the orders out of Central Command is that the left needs to acknowledge that some of its most visible people are weird, but to also gaslight everyone over what the mission truly is.

    Seems like everyone is singing from the same sheet of music here.


    • Best quip i ever heard about Politifact:

      3 foot man claims to be 6 feet tall. Politifact rates it as half true


    • As is most fact-checking. I love that the fact check is a “half truth”—that is, misleading in the same way they say the meme is. It says “Kyle Rittenhouse crossed state lines to commit the shooting” which has factual things but put together to pointlessly include the crossing of state lines and implies he went out by specifically to shoot people.

      And it’s good to know a guy intentionally shooting 4 people at a school is fine now, so long as nobody dies.


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