Housing starts mixed but tax credit expiration looms

March Housing Starts totaled 626k, a bit above expectations of 610k and Feb was revised up by 41k to 616k. The gain was solely led by a rise in multi family starts as single family starts dropped. Permits were 60k above expectations at 685k, the most since Oct ’08 as builders squeeze in what they can before the April 30th expiration of the home buying tax credit. Permits for both single family and multi family areas were up. Within weeks though we’ll be able to see the natural forces of supply and demand at work in the housing market without the influence of the distortion of some major government incentives (foreclosure process still influenced by HAMP). Overall, the US economy is definitely in a better place but juice, the steroid juice of cheap money is again having its influence and we can only hope that we can make the transition without it over the next few years better than we did last time.

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