US: Expect a 4.4% decline in housing starts in June – Nomura

Analysts at Nomura expect a 4.4% m-o-m decline in US housing starts to 1290k saar in June.

Key Quotes

“The strong labor market suggests that consumer demand for new housing likely remained firm. However, structural factors such as ongoing shortages of skilled labor and a lack of developable lots will likely weigh on construction of new single family housing. Moreover, permits for single family housing declined in May, pointing to slower starts in June.”

“In addition, we expect sharp mean reversion in multifamily housing starts in June, which increased sharply by 7.5% m-o-m in May. On permits, we expect a 1.3% m-o-m increase to 1318k saar in June as permits for multifamily housing construction could revert. However, continued slowing in single-family permits in the West could weigh on the reading for June.”