Preview: Due February 19 - U.S. January Housing Starts and Permits - Starts to correct lower, permits seen stable
We expect January housing starts to fall by 8.6% to 1.37m in a correction from a 15.8% December rise, with bad weather in January adding to downside risk. We however expect permits to be almost unchanged, -0.1% to 1480k after a modest 0.7% decline in December.
Home sales were solid in December and while pending home sales slipped, survey evidence for January held up (though February's NAHB index was weaker). January non-farm payroll details showed only a modest dip in aggregate construction hours worked, despite bad weather.
While the housing sector still appears to be mostly strong, we expect starts to pause after December’s gain, with singles falling 4.8% after three straight gains, and multiples down by 17.6% after a very strong December corrected a weak November.
A 0.4% rise in single permits would be a fourth straight, if slower than December’s 2.0%. We expect multiple permits to extend a correction from a 15.4% spike seen in November, falling by 1.2% after a 6.0% December decline.
