US Housing Starts: Despite the drop, home building remains exceptionally strong – Wells Fargo


The Housing Starts report showed a decline of 7% in July to 1.534 million (annual-unit). According to analysts at Wells Fargo, point out that despite the drop, home building remains exceptionally strong. They explained that overall housing starts have averaged a 1.577 million-unit pace over the past six months, such a pace would mark the strongest year for housing starts since 2006.

Key Quotes: 

“Housing starts fell 7% in July to a 1.534 million-unit pace. Data from prior months were revised modestly higher, which makes the decline less worrisome. Moreover, building permits rose 2.6% and are once again comfortably back above starts. Home builders are still dealing with massive supply shortages and are having to manage the flow of their projects to a much greater degree than ever before.”

“Even with these challenges, the industry is on a pace to begin construction on close to 1.6 million homes this year, which would be the best year for housing starts since 2006.”

“Prospective buyer traffic has also slowed. One of the reasons buyer traffic is off is because builders have relatively few homes to show prospective buyers. Affordability is also a hurdle for many potential buyers, and the reopening of the economy, particularly the return to work and return to school, are competing for prospective buyers' time right now.”

“While housing starts fell more than expected, most forecasters, including ourselves, were looking for a decline in July. There is no question that home building has hit some sort of near-term ceiling, with surging home prices reducing affordability and leading to a record drop in the proportion of consumers that feel now is a good time to buy a home.”

“We recently boosted our forecast for multifamily starts for this year and next, based on the recent strong absorption numbers and rise in apartment rents.”
 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD: Bulls move in and eye 1.1750/60 targets

EUR/USD bears are seeking a downside daily extension deeper into monthly support. EUR/USD bulls are stepping in which opens the risk of a meanwhile bullish correction. From a longer-term perspective, the price is pressured within monthly low territories.

EUR/USD News

GBP/USD: Pressure mounts ahead of central banks’ announcements

The Fed and the BoE will make announcements this week. UK public inflation expectations are up for this year and the upcoming ones. GBP/USD is technically bearish in the near term, poised to retest August monthly low.

GBP/USD News

EUR/USD: Bulls move in and eye 1.1750/60 targets

EUR/USD bears are seeking a downside daily extension deeper into monthly support. EUR/USD bulls are stepping in which opens the risk of a meanwhile bullish correction. From a longer-term perspective, the price is pressured within monthly low territories.

EUR/USD News

Shiba Inu bulls can't hold SHIB from dropping to $0.000006

Shiba Inu price has fallen -28% over the past four trading sessions. Bears remain in control as bulls fail to complete a breakout above $0.000008. Bulls must hold $0.000007 to prevent a drop towards $0.000006.

Read more

Fed Preview: Three ways in which Powell could down the dollar, and none is the dot-plot

No taper now, but when? That is the main question for the Fed in its all-important September meeting. The bank buys $120B worth of bonds every month and it is set to reduce the pace at some point – the first step toward raising interest rates. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures