After an unexpected plunge in January, February Housing Starts were expected to bounce back modestly (while building permits were expected to slow further) as the impact of storms fades.

The analysts were right in direction but off in magnitude as, despite a slump in homebuilder sentiment, housing starts exploded 11.2% higher MoM (after dropping 11.5% MoM in January), well above all all estimates (+1.4% exp). Building Permits fell 1.2% MoM (just shy of the 1.4% decline MoM expected)...

Source: Bloomberg

That is the third month in a row of permits declining...

Source: Bloomberg

Both single-family and multi-unit building permits declined while single-family and multi-unit starts soared...

Source: Bloomberg

Building Permits SAAR are basically at the same level they were over a decade ago...

Source: Bloomberg

Homebuilder sentiment suggests the recovery in housing starts will be short-lived...

Source: Bloomberg

Will the dovish drift in rate-cut expectations be enough to lift homebuilder sentiment and therefore permits? Or will Powell pour cold water on that tomorrow?

Source: Bloomberg

So, the forward-looking aspect of the residential construction data is not pretty... despite mortgage rates tumbling.