Preview: Due March 12 - U.S. January Housing Starts and Permits - Weaker and not only on weather
We expect January housing starts to fall by 6.0% to 1.32m to follow a 6.0% December increase while permits fall by 5.2% to 1.38m to follow a 4.8% December increase. Underlying slowing in demand and bad weather are both likely to contribute to the decline, with the latter impacting starts more than permits.
We expect starts to show singles down by 4.2% after a 4.1% December increase while multiples fall by 10.2% after an 11.3% December increase. For permits we expect a 1.2% drop in singles to extend a fall of 1.7% in December, while multiples fall by 10.1% after a 15.2% December increase.
Housing demand does appear to be slowing as signaled by softer January data from the NAHB and MBA surveys, as well as slippage in existing and pending home sales for January. Fading hopes for further Fed easing may be weighing on demand.
Bad weather came late in the month and is a bigger risk to starts than permits, with the risks most pronounced in the Northeast. Permits in the Northeast are however also vulnerable after a surge of 44.4% in December.
