The upcoming week is relatively calm on the domestic economic data front, with the highlight being the release of housing starts on Tuesday. Analysts expect a further decline in starts due to the ongoing pressure from elevated mortgage rates.
In the U.S., residential construction is facing increasing challenges. Housing starts have dropped in four of the past five months as mortgage rates have risen steadily. By the end of September, mortgage rates surpassed 7.0%, creating a new affordability hurdle for potential homebuyers. The NAHB home builder survey reflected this trend, showing a significant decline in builders’ sales expectations and a corresponding rise in price cuts. Multifamily construction is also weakening due to higher financing costs and modest rent growth. For September, a decrease in permits suggests another decline in starts, with forecasts predicting a 2.0% drop to 1,250K.
Internationally, Canada’s consumer price index (CPI) is expected to rise due to higher energy costs, though steady core inflation suggests a cautious approach to policy changes. The U.K. and Japan are also anticipated to see accelerating inflation, supporting predictions for rate hikes in November and December, respectively. Meanwhile, China’s Q3 GDP growth is projected to edge higher, driven by exports and policy support that offset domestic economic weaknesses.