Preview: Due February 16 - U.S. January Housing Starts and Permits - Positive underlying picture
We expect January housing starts to fall by 1.4% to 1440k, extending a 4.4% December decline while still not fully reversing a 10.8% surge seen in November. We expect permits to rise by 1.8% to 1520k, matching December’s gain which followed a 2.1% decline seen in October.
Housing demand slipped in response to higher mortgage rates, though has seen some signs of a recent revival as mortgage rates slipped from their highs.
Housing construction has been more resilient than housing demand, a sign of improving supply, suggesting January will see a positive underlying picture. However bad weather, notably in the Midwest, is a downside risk, more so for starts than permits.
We expect single starts to rise by 1.3% after a fall of 8.6% in December but multiple starts to fall by 7.6% after rising by 8.0% in December. We expect single permits to rise by 1.1%, which would be a twelfth straight rise revealing a positive underlying trend, while multiple permits rise by 3.2%.
