After the September housing starts, expect the push to extend and expand the first time homebuyer tax credit to intensify.
September housing starts were well below expectations...housing starts are flattening out around 590,000 for the last four months (at the peak in 2006, there were 2 million starts a month). That is an improvement from the lows earlier this year, but just barely.
The Street is trying to maintain their optimistic outlook. JP Morgan talked about "stabilization", Macquarie says: "we think eventual recovery from record lows is a compelling argument, as many downside risks continue to ease."
Raymond James is optimistic but with a caveat:" we are increasingly optimistic for the prospects of a gradual and modest housing recovery, so long as most of the government's incentives and support are not pulled away too soon."
Numbers like today greatly increase the chances the homebuyer tax credit will be extended.
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