The bad news: housing starts, at 760,000, are still a fraction of the historic highs in 2006, when starts exceeded two million a year.
The good news: if starts continue to improve at this pace (about 20-25 percent a year), housing will return to more "normal" levels in a little more than two years. By "normal" I mean levels of ten years go, around 1.5 million starts.
Can that happen? It seems like a tall order with GDP at roughly two percent this year. This is why there is a small but growing group who are arguing that this improvement in housing is a "Sell the News" event.
But it may not be over. Builders — the people with their own money on the line — are increasingly optimistic. The NAHB Housing Market Index, out yesterday, is at the highest level since March 2007. This is a good sign, and suggests builders are indeed planning to build more in the near future.
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