US Housing Starts: Storm-induced volatility likely to continue - Wells Fargo
|According to analysts from Wells Fargo, housing starts declined much further than expected, as missing activity in the hurricane-battered south loomed large and pointed out that permits are now running well above starts, implying we will see a rebound in coming months. They warned that storm-induced volatility will likely continue.
Key Quotes:
“The 4.7 percent decline in September was much steeper than consensus estimate of -0.4 percent. August starts were revised slightly higher, taking some of the sting out September’s drop. Permits fell 4.5 percent in September but remain nearly 8 percent above starts and set the stage for a rebound.”
“Total starts also fell in the Midwest and Northeast. The drop was entirely in apartments as single-family starts were up.”
“September’s drop in starts underscores the importance of Florida and Houston. Seasonal factors are unusually large in September. Non-seasonally adjusted starts fell just 2.4 percent in September by 2,500 units, all of which was in single-family. While repairs on damaged homes are not counted as starts, they may impact starts by worsening labor shortages and driving materials prices higher. Some projects may simply be delayed. “
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