Tuesday, December 16, 2008
Housing starts in November were much lower than expected, and the lowest the data began to be recorded in 1959. This is one of those cases where bad news is actually good news, because starts are now so low that even if they fall further it won't make much of a difference to the economy. Starts have now fallen 73% from their early 2006 peak, and are now much less than the ongoing formation of new households, so the oversupply of housing is rapidly shrinking. Fewer homes for sale, more people needing a home, lower prices, and lower mortgage rates all add up to a bottom in housing that is rapidly approaching. No wonder the market is up on this horrible news.
Posted by Scott Grannis at 8:55 AM