THE BASIS POINT

November Housing Starts Plummet

Housing Starts (November 2016)

– Starts seasonally adjusted, annualized rate 1,090,000. Previous was 1,340,000
– Permits seasonally adjusted, annualized rate 1,130,000. Previous was 1,260,000

There are at least two things to take from the data:

1. Housing Starts have very high month-to-month volatility. That is not surprising given the nature of housing and

2. Housing have never recovered from the Great Recession. The economy has not created enough well-paying jobs to create homeowners and many young people are burdened by student loan debt.

In places such as the San Francisco Bay Area where many well-paying jobs have been created local regulation has limited supply and prices have been driven up to levels few can afford.

The goal for Housing Starts should be 1,500,000.