US housing starts to decline modestly after an April surge

Increase in household formations and related drop in the vacancy rate might have caused the US residential investment activity to surge. Household formations are currently running near 1.5mln per year indicates demand for new housing is exceeding supply.

Societe Generale estimates, the 20.2% m/m increase in housing started in April seems to be declined in May to 1.06 million, Q2 performance is expected to be better than Q1 with a growth rate of 13.5%.