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U.S. housing starts likely to have risen slightly in October, unlikely to see renewed strength

U.S. housing starts had fallen in September, with most of the fall being driven by a 15.2 percent decline in multifamily starts. According to a Wells Fargo research report, starts are likely to have risen in October.

In the prior month, single-family starts had also come in weak, falling to a more modest 0.9 percent. Housing is not expected to make a considerable breakout to the upside at this point in the business cycle. Increased rates of mortgage and steadily increasing home prices have considerably reduced affordability. Increasing input costs have made it more difficult to build homes at lower price points, where demand is strongest, and labor costs continue to increase amidst a shortage of skilled construction workers. Building permit data for September seem to tell a slightly brighter story. Permits were upwardly revised to a gain of 1.7 percent.

“Permits traditionally lead starts by two to three months, but with buyers and builders facing significant headwinds, we do not expect renewed strength in starts”, added Wells Fargo.

At 14:00 GMT the FxWirePro's Hourly Strength Index of US Dollar was slightly bearish at -53.7103. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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