Morning Report: Housing starts fall

Posted on February 19, 2025 by Brent Nyitray

Vital Statistics:

Stocks are lower this morning on no real news. Bonds and MBS are down.

Housing starts fell to a seasonally adjusted annual rate of 1.366 million in January. This is a 9.8% decreased compared to December, and a 0.7% decrease on a year-over-year basis. Building Permits were flat at 1.48 million.

Homebuilder sentiment crashed in February, according to the NAHB Housing Market Index. Blame Tariffs. “While builders hold out hope for pro-development policies, particularly for regulatory reform, policy uncertainty and cost factors created a reset for 2025 expectations in the most recent HMI,” said NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan. “Uncertainty on the tariff front helped push builders’ expectations for future sales volume down to the lowest level since December 2023. Incentive use may also be weakening as a sales strategy as elevated interest rates reduce the pool of eligible home buyers.”

“With 32% of appliances and 30% of softwood lumber coming from international trade, uncertainty over the scale and scope of tariffs has builders further concerned about costs,” said NAHB Chief Economist Robert Dietz. “Reflecting this outlook, builder responses collected prior to a pause for the proposed tariffs on goods from Canada and Mexico yielded a lower HMI reading of 38, while those collected after the announced one-month pause produced a score of 44. Addressing the elevated pace of shelter inflation requires bending the housing cost curve to enable adding more attainable housing.”

So the HMI report was positively impacted by the 30 day suspension of tariffs.

Mortgage applications fell 6.6% last week as purchases fell 6% and refis fell 7%. “Mortgage rates decreased on average over the week, as markets brushed off unexpectedly strong inflation data. Despite mortgage rates declining, with the 30-year fixed mortgage rate dropping to 6.93 percent, mortgage applications decreased to their slowest pace since the beginning of the year,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Purchase applications were down for the week, as buyers remained on the fence, although loosening inventory may help support activity in the coming months. Refinance applications had been rising in previous weeks but dipped as rates remained close to 7 percent.”

Filed under: Economy |

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52 Responses

  1. jnc4p's avatar
    jnc4p, on February 20, 2025 at 10:02 am said:

    Good piece on the errors in Musk’s posts about Social Security Fraud.

    “The Fraud That Wasn’t

    the nexus of irresponsible tweeting, bad data, and wishful thinking

    Holly MathNerd

    Feb 19, 2025″

    https://hollymathnerd.substack.com/p/the-fraud-that-wasnt

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    • Let the mutherfuker burn!'s avatar
      Let the mutherfuker burn!, on February 20, 2025 at 10:36 am said:

      We shall see re fraud. I suspect it is larger than Holly thinks. Also, all her info is on what is supposed to happen and not necessarily what is happening. As has been demonstrated, there is an inherent avoidance of accountability and cost management in the Federal government.

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    • Arcanaut's avatar
      Arcanaut, on February 20, 2025 at 12:06 pm said:

      She makes excellent points. I don’t quite understand why the dead people not flagged as dead are not receiving payments, but her math would indicate that is true. Although I expect the $214 million in unrecovered payments to dead recipients is low. Also, as I think about it, her example of “how many old people do you know who died and the SS payment was clawed back” is not a good one, as this would be true (sometimes they actually double the claw back, if you make the mistake of sending them a check for the past-death payment, which we did, which they deposited and then sucked the same amount of the bank account anyway). But this involves accurately reporting the death and not intentionally trying to defraud the system.

      Anyone, including Musk, should be aware that first-pass analysis of complicated systems can result in duplicate (and far more) entries, and give you bad numbers. She’s right that it needs careful inspection, and the wild numbers he is proposing are not actionable. But it’s also just as reasonable to assume that it needs much deeper inspection, and there is probably more than a little unidentified fraud.

      “It’s already well-documented that many extremely old birthdates remain in the system without death updates. It’s been studied — the report is here — and the conclusion, while debatable, is not unreasonable: that fixing it would be extremely costly with little benefit, since these people aren’t receiving payments anyway.”

      No, it is unreasonable. There is no reason that mass setting a flag WHEN YOU HAVE A FILE OF IDENTIFIED SS#s IT APPLIES TO–can’t be done basically for free, with an easy rollback to the previous state by re-updating those same records. It should be virtually costless and take almost no time. The fact that that assertion is patently untrue (not just debatable) suggests there is something else going on there. Or, if true, it has been engineered that way intentionally–and again, something else is going on there.

      “It’s a miracle anything lines up at all.”

      No, it really isn’t a miracle. It’s just competence. Pretty much everything should line up. For the money the government spends, it shouldn’t be that difficult to maintain and update a system that sends out so much money. All the errors she points to are real, but they are real for all sorts of heterogeneous systems. Thus, there are very known ways to address all of them reliably.

      “One major culprit for these absurd ages is the default value problem. When a date field is missing or corrupted, some COBOL systems auto-fill it with a placeholder like 010101 (January 1, 1901) or even 000000, which then converts to the earliest or latest possible year in the system’s range, sometimes landing in the 1700s or 2200s.”

      The fix for which for competent developers should be laughably easy. Work, yes, but not at all undoable. If it just hasn’t been done, that’s either incompetence or, again, there’s some reason it hasn’t been.

      “A single COBOL-era date error can survive multiple modernizations, get misinterpreted at each step, and eventually land in a dataset as a “251-year-old Social Security recipient”

      True, and insanely sloppy for such an expensive system.

      “And he continues to fail every single day that he refuses to correct the record, instead leaning into bad memes about how tragic it is that George Washington won’t be getting a Social Security check anymore.”

      This is at the level that most political discourse operates at every day, and has for decades at this point. Why it’s uniquely a problem when it’s Musk and, you know, not the previous Democratic president, congresspeople and senators, or the entirety of the MSM, I don’t quite get. I mean, yes, my preference would be rational assertions and careful fact checking but . . .

      It is what it is. Again, like the retarded idea of sending everybody a $5000 check as a DOGE rebate, it’s the price I’m willing to pay to keep this going. Somewhere, real things are getting clarified, I strongly suspect.

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      • Let the mutherfuker burn!'s avatar
        Let the mutherfuker burn!, on February 20, 2025 at 3:58 pm said:

        Despite the naysayer’s I’m 7.75% sure some of the programs Musk identified will get cut. Also, just assigning a source for the spend in the coding at the Treasury could yield huge benefits. The electorates desire for cuts is higher now than in 2010, and there is no McConnell capable of stopping it. It remains to be seen if it actually happens and if Trump is allowed to survive.

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  2. jnc4p's avatar
    jnc4p, on February 20, 2025 at 5:53 pm said:

    Looks like actual AI trading has arrived:

    “AI Bot Wows The Crowds With Unprecedented Stock Earnings

    By John Werner, Contributor. I am an MIT Senior Fellow, 5x-founder & VC investing in AI

    Jan 03, 2025, 12:34pm EST”

    https://www.forbes.com/sites/johnwerner/2025/01/03/ai-bot-wows-the-crowds-with-unprecedented-stock-earnings/

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  4. jnc4p's avatar
    jnc4p, on February 21, 2025 at 9:02 am said:

    The horror, Trump may negotiate rather than start a war:

    “At this point, it is inconceivable that Donald Trump will use the United States military to defend Taiwan against China. If China imposes a blockade or prepares for an invasion, Trump will start a negotiation with Xi Jinping, just as he is doing with Putin, that will effectively hand over control of the island. He will then boast that he has avoided war.”

    …

    “Don’t tell me that the American people voted for such a world or such a country last November.”

    Actually they did.

    https://www.persuasion.community/p/the-ultimate-betrayal

    I did see a funny quip that people thought that Trump was going to be Chamberlain at Munich with Putin, but instead he went with Molotov–Ribbentrop.

    “Many of us had worried that this negotiation would look like the Munich conference of 1938. It is looking more like the Molotov-Ribbentrop Pact. It’s not appeasement, it’s an alliance.”
    https://www.tracinskiletter.com/p/dear-europe-become-a-great-poweror

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    • Let the mutherfuker burn!'s avatar
      Let the mutherfuker burn!, on February 21, 2025 at 9:23 am said:

      Taiwan cannot meet their own military enlistment goals, why should American blood be spilled for a country who’s citizens don’t care? Hundred’s of thousands of military age Ukrainians fled their own country rather than join the military to repel an invasion, yet we’re supposed to be ready with treasure and blood?

      Trump is playing it smart, in my opinion. If there is any butthurt on the right about this, ask George Bush and Dick Cheney if they can think of a reason for MAGA reluctance to be the world’s policemen.

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      • jnc4p's avatar
        jnc4p, on February 21, 2025 at 12:37 pm said:

        Bannon put it well:

        And it’s the same people whose taxes and pension money support everything. Where their sons and daughters are standing watch on destroyers and the carrier battle groups in the Red Sea to keep the Suez Canal open for trade to Europe.

        They’re on patrol in the Hindu Kush. They’re in Romania with the 101st Airborne. And I saw it. I served in that. And all the people in my destroyer, post-Vietnam, in the all volunteer forces, had a choice in that those early years of the Navy, were jail or the military. And my daughter, later, went to West Point. An officer who served and fought in Iraq.

        And all of her enlisted, I think of 16 enlisted guys of First Command — I think 12 were minorities who had done an average of 10 or 12 tours and had broken families and all the pressure. So it’s on them for the system to work — yet they get no real benefits from the system.

        https://www.nytimes.com/2025/01/31/opinion/steve-bannon-on-broligarchs-vs-populism.html

        Trump benefits so much by having the right opponents. The Davos crowd doesn’t fully appreciate how they are viewed right now.

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    • Brent Nyitray's avatar
      Brent Nyitray, on February 21, 2025 at 9:25 am said:

      I have zero appetite for engaging militarily with the Chinese over Taiwan.

      The single best thing we could be doing re Taiwan is to create chip fabs in the US and reduce our reliance on overseas supply.

      Though I thought when the US became energy independent, we could disengage with the Middle East too, so what do I know?

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  5. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on February 21, 2025 at 11:05 am said:

    It’s a known, known that trannies are always the hardest hit during California wildfires.

    https://twitter.com/abc/status/1892768531592192130?s=46&t=vSGsUlnc4rLxcUf7zfUiHg

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  6. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on February 21, 2025 at 11:45 am said:

    JD for the win.

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  8. jnc4p's avatar
    jnc4p, on February 21, 2025 at 1:34 pm said:

    Vance is easily one of the best communicators in the administration. Trump choose well:

    https://www.wsj.com/politics/transcript-of-wsj-interview-with-jd-vance-f76a6ff4

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  9. jnc4p's avatar
    jnc4p, on February 21, 2025 at 4:09 pm said:

    Another piece worth considering on the Trump shift in Europe:

    “The men of Normandy had faith that what they were doing was right, faith that they fought for all humanity, faith that a just God would grant them mercy on this beachhead or on the next. It was the deep knowledge — and pray God we have not lost it — that there is a profound, moral difference between the use of force for liberation and the use of force for conquest … The strength of America’s allies is vital to the United States, and the American security guarantee is essential to the continued freedom of Europe’s democracies. We were with you then; we are with you now. Your hopes are our hopes, and your destiny is our destiny,”

    – Ronald Reagan at Pointe du Hoc, France on June 6, 1984.

    It is a fascinating moment, isn’t it, when Reagan’s vision of the West is finally swept into the dustbin of history by a Republican president.

    https://substack.com/home/post/p-157579290?selection=3f9fd9cb-21a6-40af-b61e-8059d9fb10a7

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    • Let the mutherfuker burn!'s avatar
      Let the mutherfuker burn!, on February 21, 2025 at 5:49 pm said:

      Well, do we have a partner sacrificing equally with us, that shares our values? If not, are we obligated forever to defend entities that will not contribute and do not share our values? The question is, why didn’t GWB exit NATO in ‘01?

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  11. jnc4p's avatar
    jnc4p, on February 23, 2025 at 8:09 pm said:

    This is a good quip:

    Here’s a pro tip – how you know you’re not under the rule of a fascist dictator is that you can call them a fascist dictator in public, and nothing bad will happen to you.

    https://sashastone.substack.com/p/how-far-is-too-far-for-doge

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  13. jnc4p's avatar
    jnc4p, on February 24, 2025 at 11:29 am said:

    Speaking of sea changes:

    U.S. votes against U.N. resolution condemning Russia for Ukraine war

    Washington’s shift on the conflict marks a major break with Europe and coincides with the Trump administration’s bid to repair relations with Moscow.

    Updated

    February 24, 2025 at 12:19 p.m. EST

    https://www.washingtonpost.com/national-security/2025/02/24/united-nations-ukraine-russia-trump/

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    • Arcanaut's avatar
      Arcanaut, on February 25, 2025 at 9:22 pm said:

      I’m expecting Trump admin is being pro-Putin to give Putin numerous low-cost wins to make withdrawing from Ukraine having gained no real ground acceptable. Might not work but it seems a reasonable realpolitik strategy. No cost for voting against a UN resolution that probably just exists to make some political point.

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    • Arcanaut's avatar
      Arcanaut, on February 25, 2025 at 9:19 pm said:

      They would be insane to do it in California. And Tim Cook may be a social lefty but he knows how money works. And they can all see the Trump admin can be tapped to twist the screws on Europe if it keeps punishing American companies and trying to suck cash out of them, where no Democrat admin was ever going to help them.

      If Trump delivers his cut on corporate taxes for folks manufacturing in America this will just be one example of many.

      He ain’t Steve Jobs. But Tim Cook is a very smart man.

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  15. Let the mutherfuker burn!'s avatar
    Let the mutherfuker burn!, on February 24, 2025 at 4:54 pm said:

    Doesn’t this prove RFK correct? How does Pfizer think this will help them in the next 4 years? It seem like a really counter-productive move.

    https://www.statnews.com/2025/02/24/patrizia-cavazzoni-fda-pfizer-chief-medical-officer/

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    • Arcanaut's avatar
      Arcanaut, on February 25, 2025 at 9:16 pm said:

      I believe you are correct. Presumably either they owed her so had to make good or face worse, or they think it’s like it used to be and the FDA will mostly be run by the same leftist bureaucrats it has been and she will be dealing with them, not a bunch of MAHA zealots.

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  16. jnc4p's avatar
    jnc4p, on February 24, 2025 at 9:22 pm said:

    The 21st century Manson Family.

    https://www.wired.com/story/delirious-violent-impossible-true-story-zizians/

    It’s always California.

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  17. jnc4p's avatar
    jnc4p, on February 25, 2025 at 9:30 am said:

    James Carville: The Best Thing Democrats Can Do in This Moment

    Feb. 25, 2025

    …

    With no clear leader to voice our opposition and no control in any branch of government, it’s time for Democrats to embark on the most daring political maneuver in the history of our party: roll over and play dead. Allow the Republicans to crumble beneath their own weight, and make the American people miss us. Only until the Trump administration has spiraled into the low 40s or high 30s in public approval polling percentages should we make like a pack of hyenas and go for the jugular. Until then, I’m calling for a strategic political retreat.

    https://www.nytimes.com/2025/02/25/opinion/democrats-trump-congress.html

    If ever there was a perfect moment for this clip, it’s now:

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    • Arcanaut's avatar
      Arcanaut, on February 25, 2025 at 9:13 pm said:

      The Democrats are constitutionally incapable of letting the Republicans just shoot themselves in the feet, repeatedly. They will throw themselves in front of every bullet, unable to even pretend defeat much less admit. They will double-down and come up with defenses that are more damning of themselves and what they defend than the Republicans initial attacks. Their presumption is everybody who is not them is stupid and so must be led to every conclusion by the nose, with hyperbole and even obvious lies so everyone can understand how BAD the other side is.

      Trump and Musk are reckless and impulsive in many ways, and people left alone might reach their own conclusions. I don’t think Carville is wrong. But Democratic and left narcissism will not allow things to be a lit anything other than themselves. Thus they will continue to remind everybody why they voted for Trump—-not because Trump is so wonderful but because they are just that awful.

      And they don’t know how to mount a good defense. The defenses they have been mounting in favor of federal bureaucrats and wasteful spending and potential fraud have been self-evidently awful. Carville is correct, but they cannot help themselves. They will go to the mat on issues that even most Kamala Harris voters disagree with the left on, instead of just letting the Republicans overreach in a vacuum.

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  18. jnc4p's avatar
    jnc4p, on February 25, 2025 at 11:40 am said:

    This is really good:

    A Theory of Media That Explains 15 Years of Politics

    Feb. 25, 2025, 5:02 a.m. ET

    By Ezra Klein

    https://www.nytimes.com/2025/02/25/opinion/ezra-klein-podcast-martin-gurri.html

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    • Arcanaut's avatar
      Arcanaut, on February 25, 2025 at 9:05 pm said:

      Almost certainly true.

      The problem with wiping servers is if you can truly seize control of the organization and keep some knowledgeable people who are not part of the crimes being wiped, that data is likely preserved in backups or as copies or in forgotten chats that are logged, etc., etc. The fact that they kept damning data on servers suggests they never expected any kind of audit and are unprepared for a forensic anal exam.

      I imagine some interesting things will come to light.

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