U.S. housing starts likely to have risen in June

U.S. housing starts had disappointed in May with single-family starts dropped 3.9 percent and multifamily starts falling 9.7 percent. Permits had dropped in both single as well as in multifamily segment, implying there is more at play than statistical noise. With builder confidence close to cycle-highs, price gains steady and inventory historically low, the drop in single-family permits is perplexing.

On a year-on-year basis, starts are still running at 3.2 percent pace through May, with single-family accounting for all of the rise. Worker shortages might be a rising issue, with the figure of single-family homes authorized but not started rising 4 percent in May and surging 14.7 percent in the past year, noted Wells Fargo.

In June, construction employment rose 3.1 percent in June, down from a cycle-high of 6.1 percent in late 2014, and at 1.5 percent the three-month annualized rate for construction hiring implies limited near-term momentum. According to Wells Fargo, housing starts are expected to have reached 1.173 million in June.

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