US: Housing starts likely to come in at 1220k in July – Nomura

Analysts at Nomura are expecting the US housing starts to come in at 1220k in July, up 4.0% from 1173k in June.

Key Quotes

“Despite an expected rebound, 1220k would be below the Q2 average of 1262k and could indicate slow growth in housing starts in the near term. While single-family building permits were up decently in June, that increase was concentrated in the South.”

“The three other Census regions saw declines in single-family permits. In particular, the West saw continued softening in permits in recent months, possibly suggesting that improvement in starts will likely be slow.”

“Housing starts continue to be inhibited by supply-side constraints such as skilled construction labor shortages and rising building material costs. Multifamily housing starts, which tend to be quite volatile, likely rebounded strongly after a 19.8% decline in June. However, building permits for multifamily structures declined for the third consecutive month in June.”

“The recent soft readings point to some downside risk on multifamily housing starts. On permits, we only expect a modest 0.2% m-o-m increase to 1295k in July.”