PREVIEW-US housing starts to rise in Jan, permits to fall

* WHAT: January housing starts, building permits

* WHEN: Wednesday, Feb. 17 at 8:30 a.m. (1330 GMT)

REUTERS FORECAST:

* The median forecast for housing starts is for a rise to
an annual rate of 580,000 units in January after having fallen
to 557,000 units in December. Forecasts range from 530,000 to
630,000 units.

* The median forecast for building permits is for a slip to
620,000 units in January after having risen to 653,000 units in
December. Forecasts range from 540,000 to 670,000 units.

FACTORS TO WATCH:

Unusually cold weather caused a drop in groundbreaking
activity in December. But building permits, which give a sense
of future home construction, jumped to their highest level in
14 months. This suggests that housing starts likely rebounded
in January, though analysts caution that inclement weather may
cause the strength from permits to be slow to feed through to
groundbreaking activity.

Building permits are expected to have dropped in January.
The housing market is recovering from a three-year slump that
pushed the U.S. economy into its worst downturn since the Great
Depression. But the government-driven recovery is showing signs
of exhaustion, amid high unemployment and a flood of foreclosed
properties.

Housing starts are below the pace of new home sales, while
the inventory of houses under construction dropped to a record
low in December. Some analysts see little room for starts to
rise while sales remain stable.

Homebuilders’ sentiment remains stuck at low levels, but
analysts believe there is little risk of a double-dip, which
could imperil the broader economic recovery. Groundbreaking
activity expected to maintain a moderate upward trend.

Investing Analysis

(Reporting by Lucia Mutikani; Editing by Leslie Adler)

PREVIEW-US housing starts to rise in Jan, permits to fall