Episode summary
New construction update: Housing starts and homebuilder confidence
HousingWire Daily
· · Hosts: Sarah Wheeler · Guests: Logan Mohtashami
Summary
Logan Mohtashami argued that the latest housing starts and builder-confidence data do not signal a real construction boom, even if the headline numbers beat estimates or hit a multi-month high. He said the broader pattern has been flat for years: housing starts, permits, and new home sales have mostly moved in a narrow channel rather than breaking out. In his view, the market is being misunderstood because people focus on the monthly headline instead of the longer-term chart.
He also said builders are businesses, not inventory machines, so they respond to demand, margins, and rates. Mohtashami pointed to the Sun Belt, especially Texas and Florida, as the center of most recent construction, and said completed units remain modest relative to the size of the U.S. housing stock. If mortgage rates fall and new-home sales strengthen, he said the equation changes; otherwise, he expects builders to remain cautious.
Mohtashami added that builder confidence is not collapsing, but it is not strong enough to suggest a big expansion. He argued that in a mature economy with slowing population growth, the United States should not expect a return to the kind of construction surges seen in earlier decades.
Key takeaways
- Mohtashami said the headline strength in housing starts is misleading because the long-term chart still shows years of sideways movement.
- He argued that permits lead starts, and neither permits nor new home sales have broken out in years.
- Mohtashami said most new construction has been concentrated in Texas and Florida, with the Sun Belt driving much of the growth.
- He said builders act like profit-seeking businesses, so they will not push supply aggressively without stronger demand and better margins.
- Mohtashami said a real upside break would likely require lower rates and a meaningful pickup in new-home sales.
Notable quotes
“my premise for always uh that we'll never see a construction boom in this country again. Uh still stands”
“if you look at housing starts, they've literally been bouncing off the bottom around 1.3 million for for many years now”
“permits lead starts. Housing permits haven't gone anywhere for years. Housing starts haven't really gone for years”
“we're just never going to see a construction”
“the builders are again not the March of Dimes”
How the episode opens
Welcome everyone. My guest today is lead analyst Logan Moto Shami to talk about permits starts and builder confidence. Before we dive in, I want to say thank you to our sponsor, Trust and Will, for making this episode possible. Logan, welcome back to the podcast.
It is wonderful to be here. It's a housing uh starts construction day and uh my premise for always uh that we'll never see a construction boom in this country again. Uh still stands uh correct uh uh even though the headline data beat estimates.
Um it's housing starts look like at a five six month high but if you take if you pull the data out a few years and even going back decades there's something going on here that uh uh people aren't explaining correctly. Okay. So, um I I feel like this is one of the persistent themes that everyone in America has an opinion on, which is like we just need to build more houses.
If we built more houses, then that would solve the quote unquote housing crisis. Um we it's one of the reasons we had two homebuilders on at the housing economic summit to talk about what home building, what that business looks like, the affordability, what they can do, what they can't do. Um but you've always come in and you're like, the builders are not the March of Dimes.
They're not going to build just to have more inventory. That that's against their business model.
In the last decade, um you know, from 2010 to 2019, I was said this is going to be the weakest housing recovery ever in the history of America. Now, back then, housing was more affordable and there was a lot of inventory, but the builders in a in a sense um they were at a disadvantage because existing homes were so much cheaper and everyone had lower rates.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- housing starts
- building permits
- homebuilder confidence
- new home outlook
- housing market
Watch the episode
Watch “New construction update: Housing starts and homebuilder confidence” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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