Preview: Due July 17 - U.S. June Housing Starts and Permits - Multiple starts to bounce, but trend is slowing
We look for June housing starts to bounce by 13.0% to 1.33m to correct a sharp 15.4% plunge seen in May, with most of the move again due to the volatile multiples component. We expect permits to suggest a modestly negative underlying trend, falling by 2.1% to 1.38m.
May’s housing starts plunge was largely due to a 40.2% drop in the volatile multiples sector, which we expect to correct higher by 52.5% in June, though June’s level of 450k would still be down from April’s 493k, if up from 295k in May. For single starts we expect a marginal 0.2% decline to follow a 1.9% drop in May.
Permits are less volatile than starts, though also saw slippage in multiples in May, by 4.4%, with singles rising by 1.2% to leave an overall decline of 0.9%. In June we expect singles to fall by 2.5% and multiples to fall by 1.5%. Housing data has been mixed but a loss of momentum in new home sales trend is likely to be reflected in data for starts and permits.
June’s non-farm payroll showed a modest increase in construction employment but a third straight decline in residential building. A rise in June housing starts should be seen as corrective.
