Wednesday, October 21, 2015

US: Housing little exposed to global backdrop - Wells Fargo

FXStreet (Córdoba) - Wells Fargo Bank economists Mark Vitner and Sarah House, analyse the latest housing numbers and note that housing starts and new constructions could head up further during 2016.

Key Quotes:

"Housing starts jumped 6.5 percent in September amid continued strength in the multifamily sector. Housing is one area of the economy that can continue to improve even if the rest of the economy slows slightly."

"Single-family construction on the other hand continues to make slow but steady gains. Starts edged up 0.3 percent in September and averaged a 746,000-unit pace over the third quarter, up from 706,000 in Q2. Even as permits have been running below starts for three months, the low levels of inventory means that any new sales are likely to push starts higher."

"Even as other parts of the economy have struggled more recently under the weight of slower global growth and a stronger dollar, housing has held up well. Moreover, we believe new construction will continue to rise in the months ahead."

"Limited inventory of both new and existing homes has boosted home prices, which has made new residential development more attractive. We look for housing starts to average around a 1.22 million-unit pace in the fourth quarter before edging up further in 2016."
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