Housing Market At 'Recession 1982 Levels,' Mark Hanson Tells CNBC

M Hanson Advisers' Mark Hanson dissected the Commerce Department's June housing data and said there is reason to be concerned on CNBC today.
By Lindsay Rittenhouse ,

NEW YORK (TheStreet) -- The Commerce Department's U.S. June housing data released this morning shows reason to be disconcerted, M Hanson Advisers' Mark Hanson told CNBC's Rick Santelli on "Squawk on the Street" Tuesday.

Housing starts in June reached an adjusted annual pace of 1.19 million units, compared to analysts' expectations of 1.17 million. However, May's housing starts were revised from 1.16 million units to 1.14 million.

The Commerce Department reported June building permits rose 1.5% year-over-year to a unit rate of 1.15 million.

The housing start record high is 2.7 million units reported in 2006 and the ultimate permit high was a 2.26 million unit rate in 2005, according to Santelli.

"This morning's start number, if you strip out all the machinations of the bubble 1.0, we're at 1982 levels. Recession 1982 levels. And we're sitting here with starts and permits and sales, half of that, of which is normal, with prices at 110% of bubble 1.0. I don't think that's sustainable," Hanson said.

Housing is seeing "generational" high prices on homes but weak demand. "Something has to give," he explained.

Hanson does not predict that people will start buying homes in excess now "after eight years of 0% interest rates."

The U.S. saw a spike in housing demand in the beginning of the year but the market is currently experiencing an "air pocket or hole" in home sales, Hanson noted.

"At the same time prices are hitting generational highs and supply is going through the roof in many key regions in the U.S. so I think we're past our peak," he concluded.

The S&P Home Builders Select Industry Index (SPSIHO) is falling by 0.2% to $3,551.87 mid afternoon.

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