Preview: Due June 18 - U.S. May Housing Starts and Permits - Multiples to lead modest declines
We expect May housing starts to see a modest fall of 0.8% to 1350k to follow a 1.6% April increase, while permits fall by 1.5% after a drop of 4.0% in April. Trend now looks marginally negative though the May declines are likely to be led by the volatile multiples sector.
Housing sector survey evidence is mostly quite subdued with mortgage rates having risen but new home sales were resilient in May. May’s non-farm payroll suggested little change in construction activity. Weather may be a marginal negative, with some wet weather late in the month.
After a modest rise in April, starts are not due for a sharp move. We expect single starts, supported by new home sales, to correct higher by 2.5% after a 2.1% March decline but multiple starts to fall by 7.8% after a 10.7% March increase.
We expect single permits to fall by only 0.3% after a 5.0% April decline but multiple permits to fall by 3.8% after a 2.0% April decline, to extend the correction from March’s strong 10.2% increase. Permits trend now looks negative with March’s 1.9% increase the only rise since November, and followed by a 4.0% decline in April to restore the negative trend. This is likely to weigh on starts.
