US: Housing starts likely to decline by 8.0% in March - Nomura

The research team at Nomura is forecasting an 8.0% m-o-m decline in housings starts in March, slowing to an annualized rate of 1185k from 1288k in the prior month.

Key Quotes

“We expect single-family housing starts to slow notably after a strong increase in February. In addition, based on incoming data, we expect the strong drag from multi-family housing starts to continue. Our forecasts take into account the weather in March, which was colder than usual. As the temporary boost from the two previous months of unusually warm weather dissipates, we expect some downward pressure on housing starts. Moreover, payrolls in the residential construction sector and related specialty trade contractors declined slightly in March, portending to some moderation in residential construction activity.” 

“Moreover, we expect an increase of 1.2% m-o-m for building permits in March, raising the annualized rate to 1230k from 1216k in the prior month. As noted, March was colder than January and February and residential construction-related employment was on the weak side. However, home-builders’ sentiment remains highly elevated, pointing to some recovery in building permits, in our view.”