U.S. Homeowners Become Renters – Welcome to the Third World America
By: John Rubino
Market Oracle
May 17, 2014
This morning’s housing report was huge. As one representative headline put it: “Housing starts up sharply; permits highest since 2008″.
Dig just a little deeper and it’s still huge, though in a different way. Turns out that all the increase was in apartment building, while single family homes — the linchpin of what used to be thought of as the American Dream — actually fell yet again. Here’s a brief but on-point analysis from the New York Times:
Housing Is Recovering. Single-Family Homes Aren’t
The headlines in the new report on home building activity — which is being closely watched, after many other kinds of data point to a softening in housing — are pretty terrific.
The number of permits for new housing units soared 8 percent in April, the Census Bureau said on Friday, to an annualized 1.08 million. And the number of homes on which builders began construction rose a whopping 13 percent, to an annualized 1.07 million. If nothing else, the numbers help assuage fears that the housing industry is losing momentum. It now looks like the rough winter was indeed a major factor holding back home building activity so far this year, and there is now a spring thaw underway.
But even in the good new numbers, there is a clear trend evident: The entirety of the improvement is coming from more building of housing in structures with five or more units, most commonly rental apartment buildings.
The number of permits issued for single-family homes rose by a mere 2,000 annualized rate in April, where the number for units in these so-called multifamily structures rose by 81,000. The same story applies for housing starts, where the number of single-family homes rose a measly 5,000, versus 124,000 for multifamily units.
In other words, if you think that this housing recovery involves any meaningful increase in the number of traditional, suburban single-family homes with a yard and picket fence, you have it wrong. The number of single-family homes started is well below its level of late last year and still at February 2013 levels. Multifamily construction, meanwhile, has been soaring throughout the last five years.
The Rest…HERE
