Is the US housing market approaching bottom? Some think it might be. In the US, one of the measures that matters is starts data – that’s new homes being built. If you take a sharp intake of breath, use a lot of imagination and then season it with a pinch of hope, you could actually say things got better in February.
This time last month, the US Conference Board had housing starts in January at 1,012,000. Then in February, starts were 1,065,000, a healthy rise.
The picture was made complicated, but no less aesthetically pleasing, yesterday, when the Conference Board also announced it had upped its estimate for January’s stats. It now has the official figure for January as 1, 071,000, a lot better than its original estimate. This does mean, of course, that thanks to the revised figures for January, the Conference Board is now recording a slight fall in February. But then the fall really was very modest, and in any case, next month, the Conference Board may well revise its estimates again, so we won’t know the true story for a while yet, and by then, of course, no one will care about what happened in January and February, all eyes will be on the March data.
Then again, maybe it’s time to add more seasoning to the housing dish, this time a pinch of salt – because it wasn’t all good news.
Permits for new builds fell quite dramatically in the month, from 1,061,000 to 98,000.
In any case, as Capital Economics said, “Furthermore, because of the inherent lags involved in the construction process, even when starts eventually level out, the number of houses under construction and being completed will continue to decline for another 8 months. Housing activity will continue to be a drag on overall economic growth until at least the end of this year.”
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