{"id":149825,"date":"2019-06-18T08:00:35","date_gmt":"2019-06-18T12:00:35","guid":{"rendered":"https:\/\/www.countingpips.com\/?p=149825"},"modified":"2019-06-18T06:43:15","modified_gmt":"2019-06-18T10:43:15","slug":"us-building-permits-could-rise-in-may","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2019\/06\/us-building-permits-could-rise-in-may\/","title":{"rendered":"US Building Permits Could Rise In May"},"content":{"rendered":"
June 18, 2019<\/div>
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By <\/strong>Orbex<\/strong><\/a><\/p>\n

The monthly building permits and housing starts data will be coming out today amid a quiet US trading session. The data which covers the month of May is forecast to show no major changes from the previous month.<\/p>\n

Economists polled\u00a0expect the building permits to be at 1.30 million<\/strong>. This marks a somewhat unchanged print from a revised 1.29 million building permits issued the month before. On a year over year basis, building permits grew just 1.0% in April.<\/p>\n

The data underlined the suggestion that a speed up in construction was unlikely to happen.<\/p>\n

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The\u00a0housing starts data is forecast to show an increase of 1.24 million<\/strong>. This is, again, the same pace of increase as seen in April.<\/p>\n

But with the home builder confidence rising slightly in May, today\u2019s data could see a\u00a0modest beat on the estimates<\/strong>. Data from the home building activity contributes to the overall GDP. Some view this as a sign of economic strength.<\/p>

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While the US economy has been fairly better, the recent trends in the labor market, however, seem somewhat alarming. The housing market data comes ahead of the Fed\u2019s meeting this week on Wednesday.<\/p>\n

The prospects of a\u00a0Fed rate cut later down the line<\/a>\u00a0this year could, however, help the sentiment in the housing sector for a while.<\/p>\n

Building Permits Rise 1.29 Million in April<\/strong><\/h2>\n

April\u2019s building permits and housing starts data did not show any major shifts in the housing sector.<\/strong>\u00a0 Most of the modest gains came from multi-family units which drove the bulk of the data. This was followed by increases in single-family units.<\/p>\n

This coincides with the rebound in new home sales in the previous month. The new home sales report, according to data from the Commerce Department grew to a revised 723k. But new home sales grew at a slower pace in April to 673k<\/strong>\u00a0on a seasonally adjusted basis.<\/p>\n

The data for April, although subdued, was in line with estimates. Overall,\u00a0building permits and housing starts reports are on a firmer footing<\/strong>\u00a0following the slump in the previous months.<\/p>\n

The housing sector data also got a boost with US mortgage rates falling sharply since the fall of last year. This makes home buying, both new and existing, somewhat more attractive.<\/p>\n

The Fed had initially pledged to keep rates unchanged for the remainder of the year. The announcement was made at the March FOMC meeting. Since then, the housing markets have been attempting to recover off the lows.<\/p>\n

US Home Builder Confidence Rises in May<\/strong><\/h2>\n

Data from the National Association of Home Builders or NAHB saw\u00a0home builder sentiment improving<\/strong>\u00a0in May. The NAHB confidence ticked higher to 66 in May, rising by three points from the month before.<\/p>\n

The reading on the home building sentiment index was the highest since October of last year. A reading above the 50-level suggests expansion. The data was a welcome change as home building confidence was weak for most of 2018.<\/p>\n

The sub-index gauge of the NAHB report which tracks sales conditions grew by three points, rising to 72.\u00a0The improvement in the home builder\u2019s confidence could potentially suggest that both housing starts and building permits could rise in May.<\/strong><\/p>\n

While mortgage rates have been in favor, driving activity, the cost of raw materials dents the sentiment. With the\u00a0US engaged in a trade war with China<\/a>, the cost of importing raw materials has increased.<\/p>\n

However, it is yet to be known whether the increase in raw materials will offset whatever gains are coming from the lower mortgage rates.<\/p>\n

Will Building Permits Rise in May?<\/strong><\/h2>\n

There is scope for building permits to rise in May<\/strong>, perhaps even beating estimates. Given the higher homebuilder confidence in May and the warmer weather, the number of units could rise.<\/p>\n

But on the downside,\u00a0the risks of the tariffs on imports could have an impact to a certain extent<\/strong>. Overall, it\u2019s quite likely\u00a0that building permits could beat the estimates of 1.30 million.<\/p>\n

By <\/strong>Orbex<\/strong><\/a><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Orbex The monthly building permits and housing starts data will be coming out today amid a quiet US trading session. The data which covers the month of May is forecast to show no major changes from the previous month. Economists polled\u00a0expect the building permits to be at 1.30 million. This marks a somewhat unchanged […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-149825","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149825","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=149825"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149825\/revisions"}],"predecessor-version":[{"id":149847,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/149825\/revisions\/149847"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=149825"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=149825"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=149825"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}