As our old and infamous quote machine Mark Twain once said, there are lies, damn lies, and then there are statistics. This is exactly the formula used today to promote a fallacy that housing starts exploded through analyst estimates, and led to the the fake and fabled Santa Claus Rally currently going on in the markets.
The reason why it is such a lie? The Department of Housing and Development claimed each separate apartment in multi-family dwellings as a new build, thus 'channel-stuffing' the total number of new residences, and corrupting the report. (In the past, multi-family dwellings were counted as one single residence)
Once again the US Department of Truth succeeds in fooling the algos: today's November Housing Starts number was a blockbuster: at 685K annualized units, it came higher than the highest estimate (range was 600K to 655K), and certainly higher than the average estimate of 635K. It was obviously higher than the downward revised previous number of 627K. All great: housing soaring, employment must be back. Right? Wrong. One peek under the covers shows where all the "growth" comes from - the entirety of the surge was due to the absolutely hollow 5+ multi-family units which jumped by a whopping 25% sequentially, and which as everyone in the industry knows are nothing but inventory padding by homebuilders who "build just to build." Unfortunately, as the all important 1 Unit structure trendline shows, there is absolutely no improvement in this critical series. But hey - it fooled the robots. And now it will take at least 12-24 hours before vacuum tubes process the reality of this latest spin. By then, however, we may well have had our Christmas rally. - Zerohedge
Thus, the ultimate truth here that is being missed by the mainstream... builders are preparing for a society of renters, not home owners, and that does not bode well at all for the economy.