Housing starts came out better than expected in November:+3.2% to 1.256m. It was better than consensus estimates for an unchanged readingat 1.228m. Building permits rose 5.0% to 1.328m. Economists had forecasted building permits to decrease to 1.259m. The data reduced concerns on the outlook of the real estatesegment, which jumped yesterday following the decline of the NAHB housing market index to 56, the lowest in the three and half years.
Despite better than expected housing starts data for November, we think that the real estate sector could continue to weaken in the months to come due to higher mortgage rates and tight inventory.