Lumber Prices May Signal A Bounce Back In February's Housing Starts

Housing starts for January missed by a considerable margin this morning. Consensus estimates were in the range of 950K while the actual number came in at 880K. Perhaps more worrying was the fact that building permits, a leading indicator for housing starts that is usually not as affected by bad weather, was also below expectations (937K vs consensus estimate of 975K). The silver lining is the lumber prices have held steady over the past few months which may signal that housing starts in February could improve back towards the 1 million range.