US: Housing starts expected to surge by 0.7% in March – Nomura

Analysts at Nomura forecast a 0.7% m-o-m increase in US housing starts to an annualized pace of 1245k in March (Consensus: 2.4% increase to 1266k), from 1236k in February.

Key Quotes

“Weather poses a downside risk as cold weather returned in March following a warmerthan-usual February. Reflecting the weather effect, aggregate weekly hours worked by all construction sector employees declined 0.4% m-o-m. Thus, single-family housing starts likely fell in March. However, positive payback to multifamily housing starts could offset much of the decline in the single-family sector as multifamily starts, a typically volatile series, dropped sharply by 26.1% m-o-m in February.”

“For housing permits, we expect a modest 0.3% m-o-m decline to an annualized pace of 1317k (Consensus: +0.3% to 1325k). Colder weather, weaker residential construction employment growth and a slight pullback in home builder expectations for housing market sales likely resulted in fewer permits being issued in March.”