U.S. housing starts likely to have risen in August, says Wells Fargo

U.S. housing starts is expected to have increased in August. July had recorded a disappointing result, with housing starts dropping 4.8 percent sequentially and falling 5.6 percent year-on-year. The softness in July was focused in the multifamily component of the index, which dropped 15.3 percent. Given the late-cycle fundamentals in that market, the fall is not surprising. Housing starts are being held back by shortages in both lots and labor. Houston has been a major driver of housing construction in 2017, and Hurricane Harvey is expected to nearly cause delays in planned housing starts.

According to a Wells Fargo research report, August starts are likely to have risen 1.174 million unit pace, a rise of 1.6 percent. The starts are expected to be around 1.220 million units for 2017, down slightly from the earlier forecast because of the implications from both Hurricane Harvey and Irma, as single-family building would be held back in parts of Texas and Florida due to delays related to those storms, added Wells Fargo.

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