Tuesday, June 16, 2009

Housing Rebound?

The Lehmann Letter ®

Today the Census Bureau announced that May housing starts rebounded to 532,000.

The chart below reveals that starts remain below all other post-WWII troughs. It’s still too early to declare victory.

Housing Starts

(Click on chart to enlarge)

(Recessions shaded)

Moreover, the foreclosure crisis continues unabated. Each month more existing homes are dumped on the market by lenders who have foreclosed on them.

New homes, whose construction has just begun, will also add to the total pool of available structures. That does not help resolve the crisis.

A construction turnaround would be more welcome if it did not exacerbate the glut of homes on the market.

(The chart was taken from http://www.beyourowneconomist.com. [Click on Seminars and then Charts.] Go there for additional charts on the economy and a list of economic indicators.)

© 2009 Michael B. Lehmann

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