A slight decline in housing construction: the negative real economic impact has not yet begunA slight decline in housing construction

– by a New Deal Democrat

Housing permits (gold) rose slightly in January from December lows, while the more volatile new housing starts (blue) eased again. The much less volatile single-family permits (red, right scale) also fell again to a new post-pandemic low:

This is a very important long-term leading indicator and shows that the impending misery in the economy due to the housing sector is nowhere near the bottom.

But, as I wrote on Monday, the most important indicator in the entire economy right now is probably housing units under construction, which is the “true” economic impact of the industry. Here was a very slight (less than 1%) decline from a revised peak in October:

The bottom line is that the real *economic* housing downturn hasn’t started yet.

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