Updates
Later, 4:26 p.m. CT: Home Depot posts 4Q21 earnings; tops forecast.
Later, 4: 21 p.m. CT: see first comment.
Later, 12:01 p.m. CT: this is quite remarkable. I posted the original post earlier this morning. Now, I note that Home Depot announced that it raised its dividend -- and raised it considerably! Link here. Dividend history here. Previous quarterly dividend was $1.65. New dividend, $1.90, record date, 3/10/22 and payable date 3/24/22. That's a 15% jump in the quarterly dividend.
Original Post
US new housing starts, link here.
The problem with Rick Santelli, CNBC when he reports this data, he never shows the graph. His data is simply month-over-over, with revision, with perhaps a short historical context. Like monthly rig counts, monthly new housing starts is background noise. It's the long-term trend.
New houses, unlike existing house sales, drives durable goods -- washers, dryers, EV outlets in garages, solar panels, furniture, entertainment centers, and sleep-number beds -- and durable goods drive trucking and trains.
I will even hazard a guess that many new houses come with a new car these days.
And how much of this is driven by post-Covid, geographical moves -- from high-tax, mask-mandated-crazy states to less restrictive, lower tax states? And with high heating costs in New England, how many folks moving to states with low-energy costs? And it's the folks with income that can afford to move. Low income and low-middle income -- the folks that don't pay much in state taxes -- cannot afford to move.
Look at that jump pre-Covid -- no one predicted Covid -- and yet, that spike just prior to 2020 is quite remarkable. Never discussed, never explained but that's certainly eye-catching.
Then, of course, we have the debacle that was Covid -- but the slump did not last long and within six months or so the curve was back to where it was pre-Covid. The question is: to what extent are housebuilders still playing catch up?
My hunch: the corresponding graph for Germany, France, and Great Britain looks nothing like this graph. Let's check:
One word: recession.
France. If you check out France, be sure to expand the graph to ten years.
