US: Housing start shows solid number in June, Permits rise modestly – Wells Fargo

Housing data released on Friday showed an ongoing recovery in Housing Starts and Building Permits. According to analysts at Wells Fargo, both numbers are likely headed higher in the coming months, but they warn builders are running into some bottlenecks that could limit the recovery. 

Key Quotes: 

“Housing starts rose 17.3% in June, with both single-family and multifamily starts rising to their highest level since March. Starts more than doubled in the Northeast, as builders finally got back on track following a three-month lull.”

“The recent drop in conventional mortgage rates below 3% should bring out even more buyers, bolstering builder confidence even further. Homebuilder confidence, which was reported yesterday, had already rebounded before the latest drop in mortgage rates.”

“The National Association of Homebuilders/Wells Fargo Housing Market Index (HMI) jumped 14 points in July to 72. The increase was driven by a resurgence in buyers, particularly in the Northeast and Midwest.”

“With buyers coming back, builders fell confident to ramp up new construction. Single-family starts jumped 17.2% in June and permits rose 11.8%. Both numbers are likely headed higher in coming months, but builders are running into some bottlenecks that will likely limit the extent of gains.”