Housing Starts Fall (but look beneath the headlines)

Housing starts fell 4.8% to 708,000 in May (consensus was 722,000). Starts for single family properties increased 3.2% m/o/m to 516,000 in May.

Note this returns us back to Spring 2010 levels of construction.

Despite some happy talk, you should not mistake this modest stabilization for a turnaround in the housing market.

Prior to the credit bubble, single family starts were trending at about 1.2 million units. During the mania, we saw single family starts near 1.8 million per year.

I am compelled to point out that Starts compete with distressed sales and foreclosures. While we are seeing improvement, much of this comes formt ghe Foreclosure abatement of the past year. That has ended, and Foreclosures (as measured by RealtyTrak) are once again rising.


Foreclosure Machinery Creaks Back to Life (June 14th, 2012)

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