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Housing Starts, Building Permits – What to Expect in Markets Tuesday



On Tuesday, new data on housing starts and building permits in May will provide another snapshot of the state of the housing market in a context of falling mortgage rates and mixed signals about homebuyers' sentiment. dwellings.

Economists generally expect new home construction in the US to increase for a third consecutive month in May. According to consensus estimates, housing starts rose 0.4% year-on-month at an annualized rate of 1.240 million for the month, following a gain of 5.7% in April, according to Bloomberg data. Permits, predating future construction, are expected to have increased 0.2% to an annualized rate of 1.293 million.

The report will be released at 8:30 am (Eastern Time) by the US Census Bureau and the Department of Housing and Urban Development.

Single-family dwellings were the main drivers for April's increase in housing starts, up 6.2% for this category. Single-family permits declined during the month, but were offset by an increase in building permits for multi-family dwellings, which include apartments and condos.

"Individual building permits fell sharply by 3.7% in April and suggest a slowdown in single-family housing starts in May," Lewis Alexander of Nomura wrote in a note on Friday. "While multi-family permits have resumed in April, we expect a return on investment in May, the unstable multifunctional May starting after three consecutive monthly increases."

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Data on the US housing market were jerky second quarter: Mortgage rates fell and & nbsp;rising real estate prices slowed, favoring new buyers and construction. Mortgage applications began to rise in May after falling every four weeks in April, according to & nbsp;Data from the Mortgage Bankers Association. "data-reactid =" 20 "> Real estate market data in the US was sluggish in the second quarter as mortgage rates fell and house prices slowed, favoring new home buyers and construction. Mortgage loans began to rise May after falling every four weeks in April, according to data from the Mortgage Bankers Association.

However, homebuilders' morale dropped unexpectedly in June for the first time this year, as construction costs and labor problems increased.

The National Association of Home Builders (NAHB) announced Monday that builders' confidence in new single-family homes dropped by two points to 64 in June, falling back from the six-month high reached in November. April and missing consensus expectations. The NAHB survey is considered an approximation of the government's data on housing starts.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" Despite falling mortgage rates, housing prices remain partly unchanged high relative to income, which is particularly difficult for novice buyers, "said NAHB chief economist, Robert Dietz, in a & nbsp;declaration. "Builders continue to face excessive regulations, a shortage of land and a skilled workforce that is detrimental to affordability and depressing supply." "Robert Dietz, Economist head of the NAHB, said in a statement: "Builders continue to face excessive regulation, a shortage of lots and a shortage of skilled labor that is detrimental to economic affordability and a depressing offer.

Consensus economists expect housing starts to fall slightly in May, marking a third consecutive monthly gain. (Photo by Justin Sullivan / Getty Images)

NAHB values ​​lower than forecast for May, however, remained within the average range observed in recent months. Sentiment levels have remained in the 60 to 60 year range over the last five months. Readings greater than 50 are considered positive.

At the same time, reports from the Bureau of Labor Statistics and ADP / Moody on employment signaled weak employment in the construction sector in May, suggesting a weaker-than-expected reading of housing construction Tuesday.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The actions of homebuilders have outperformed the market in the sense wide for the year The SPDR S & amp; Homebuilders ETF (XHB) increased by 27.5% in 2019, compared with 15% for the S & P 500. "data-reactid =" 37 "> The actions of homebuilders have surpassed the market as a whole since the beginning of the year. SPDR S & P Homebuilders SPDR (XHB) grew by 27.5% in 2019, compared with 15% for the S & P 500.

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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck"data-reactid =" 40 ">Emily McCormick is a journalist for Yahoo Finance. Follow her on Twitter: @emily_mcck

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