Housing data may still suffer from Irma, Harvey

Hurricanes Harvey and Irma are long gone, but lingering effects of the destructive storms are likely to cause damage to incoming housing data this week.

This week’s batch of economic reports will be dominated by housing-related ones, including an October update on the level of home builder confidence and September data on housing starts and sales of existing homes. Investors will also get snapshots of the health of manufacturing in key regions such as New York on Monday and Philadelphia on Thursday.

The third-quarter earnings season moves into high gear as well, with 55 companies in the Standard & Poor’s 500 stock index set to report results, according to earnings-tracker Thomson Reuters.

On Tuesday, the first housing data point to hit will be the National Association of Home Builders’ housing market index. Economists expect a slight dip to

63, from 64 in September, a month that also saw builder’s optimism dip slightly because of the fallout from Hurricanes Harvey and Irma.

“Rising building material costs and continued labor shortages in the construction industry may continue to weigh on home builders’ sentiment over the near term,” Lewis Alexander, an economist at Nomura, noted in his weekly forward-looking economic report. Home-shopper traffic was also likely curtailed in parts of the country impacted the the storms.

September housing start data comes out Wednesday. And while the consensus forecast is for starts to come in at an unchanged annualized run rate of

1.18 million units, Nomura is calling for a drop of 1.7% to 1.16 million. Nomura cited a slowdown in single-family permits in August and construction disruptions in Florida because of electrical blackouts after Hurricane Irma as well as a lack of complete data on housing starts in Texas in the aftermath of Harvey for its less bullish view.

“The recent hurricanes will likely raise uncertainty on upcoming readings, Nomura noted.

Friday is the final day for housing data with the report on existing home sales in September. And again there is expected to be a hurricane effect.