The housing market has been looking for a bottom for years. Has it finally located the floor? There’s a fresh glimmer of hope on that front via this morning’s update on new housing starts and building permits issued. Sort of.
Although housing starts slipped 4.0% last month vs. November, new building permits last month jumped 8.3%, the U.S. Census Bureau reports. More importantly, the long-suffering trend in this pair of critical measures of the housing market finally seems to have found a base, as our chart below suggests. Maybe.
We’ve been wondering where the bottom is for years now, including here and here. Way back in 2006, we listened to former Fed head Alan Greenspan tell an audience that all was well.
Predictions that the suffering was over have come and gone only to see the red ink keep spilling. Suffice to say, we’re humble in expecting too much too soon. But it’s starting to look like the end of the great housing collapse has arrived. Finally. Of course, even a broken watch is right twice a day.
That’s not to say that a powerful rebound is imminent. Echoing the trend in the labor market and the economy overall, a period of treading water may be in store, and for an unusually lengthy run relative to post-recession revivals in the past. But while everything’s in slow motion this time and “good news” has been adjusted down, we still need to sit tight before we can walk. One day, perhaps, we’ll run. But the sneakers are likely to collect quite a bit more dust before it’s time to take them out of the closet.