Once upon a time the US housing market was mostly about single-family, residential units. Those days are long gone now that the average American can neither afford to save enough money for the down payment nor find a bank willing to lend a mortgage to an Ivy League educated Millennial whose only job prospect is McDonald's. Instead, in the New Paranormal, it is all about renting.

Earlier today the Census Bureau released the housing starts and permits data for June. And, sure enough, when it comes to single-family starts and permits, there was barely much of a change: in June single-family starts (blue line) declined from 691K to 685K, the lowest level since March. However it was the Multi-family, aka rental housing (red line), where the action has never rarely been more frantic as can be seen on the chart below.

But this was nothing compared to what is just over the horizon, aka in permits, where single-family against as barely notable, rising to 687K, or about half the pre-crisis peak. But, once again, it was multi-family units where all the action was as can be seen by the red line in the chart below.

And here, for perspective, is the longer-term chart of rental housing permits: we are now back to levels last seen in 1990 following a two month scramble that is nothing short of historic.

How this looks compared to single-family housing: this is a problem because while single-family houses can be easily securitized and are thus much more “cash equivalent”, rental units will be far more difficult to convert into money-equivalent credit creation:

The silver lining to this latest building burst: once all these rental units come to market, record high rents may finally normalize… which is probably not a good thing for sellers of rental-backed securitizations.

It also means that a conventional housing recovery in the US is now dead: the builders have spoken and what the next generation wants is to rent, not to buy.