June Housing Starts Preview
June Housing Starts are expected to come in at 960k vs. 975k last time. 960k would be the lowest level since Mar-91, when Starts fell to 921k. June Building Permits are expected to fall again as well, to 965k from an upwardly revised 978k pace in May. As recently as May Housing Starts were up 2% after dropping 10.7% the previous month.
The slowdown in Starts appears to be diminishing but the threat to Fannie Mae and Freddie Mac, added to the disappearance of non-conforming loans, raises the specter of a worsening of housing data in general — starting with sales and supply, and backing up to Starts and Permits. In short, financial sector problems have potential to create a negative feedback loop through the housing market.