US: Housing starts rebound in March - Nomura

Analysts at Nomura note that the US housing starts in March increased 1.9% m-o-m to an annualized pace of 1319k (Nomura: +0.7% to 1245, Consensus: +2.5% to 1267) and also, February’s reading was revised up from 1236k to 1295k, driven by an upward revision to multifamily starts.

Key Quotes

“The increase in March was driven by the multifamily sector, which rose 14.4% after a 10.2% decline in February (revised up from a 26.1% decline). Multifamily starts have been even more volatile than usual in recent months. Single-family starts, by contrast, declined 3.7% in March after a meager 0.1% m-o-m increase in February, pointing to some softness in the single-family sector. This corresponds to a downward trend in recent months from the NAHB’s housing market index’s single-family sales indices covering sales expectations and prospective buyer activity.”

“Taken altogether, we would caution against reading too much into one month’s reading for housing starts, especially given the higher-than-usual amount of volatility from the multifamily sector. However, today’s single-family housing data nonetheless point to some softening in residential activity that bears monitoring over the near term.”