I wouldn’t read too much into the new starts, permits, and sentiment data, but I don’t take them as very encouraging.
Housing starts, which seemed to have been moving up, nudged down last month.
While housing permits, which had been trending down, nudged up.
What really counts at this point, though, is home sales– it won’t do any good to build the homes, if nobody buys them. And even if sales do start to rebound, the recent higher mortgage rates would make me worry that it could be short lived.
Sentiment among home builders fell to a 16-year low. And the University of Michigan index of consumer sentiment, which had been trending down, took a significantly sharper tumble down this month:
That last one worries me. The index still remains above recent lows. But don’t forget that those low values in the fall of 2005 were enough to bring GDP growth well down, even when housing was still going strong.