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. “
Author
Matías Salord
FXStreet
Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.
