Preview: Due March 19 - U.S. February Housing Starts and Permits - Starts to rebound from weather-depressed January
We expect February housing starts to rise by 18.0% to 1570k after a 14.8% January decline that was probably due to bad weather. We expect permits, less sensitive to weather, to rise by 1.4% to 1510k after falling by 0.3% in January.
Underlying trend is probably still positive with single permits having risen for twelve straight months. For February however we expect single permits to rise by only a modest 0.9%, slower than the two preceding months, as recent gains in mortgage rates start to restrain demand. We expect single starts to rise by 9.6% which would not quite fully reverse two straight falls that followed a sharp November increase.
We expect the more volatile multiples sector to show starts rising by 43.7% after a 35.6% January decline and permits rising by 2.6% after a 5.3% January decline.
Housing construction has been more resilient than housing demand, a sign of improving supply, though housing demand picked up in late 2023 as mortgage rates moved off their highs. Mortgage rates have started to pick up again in early 2024, but improved weather is likely to be the key for February housing starts. February’s non-farm payroll showed construction aggregate hours worked rebounding from a weak January.
