Housing starts increase

By Melissa Wirkus

As the housing market continues to slow, we still see some hope for its return to normalcy in the near future.

One of these rays of hope comes from an unexpected source – Home builders.

Home building companies of all shapes and sizes have been experiencing some tough times lately, as they decide what to do with the excess of homes in their glut of inventories.

But good news came recently as housing starts increased throughout the nation, which was a very unexpected surprise.

An October 18, 2006 article by Chris Isidore of CNNMoney.com, “Housing start gain may signal slide is over,” shows how there has been a surprise increase in housing starts, but permits also fell more than expected, ushering in more bad news.

This is juts one great example of how good news is always followed by bad news, or vice versa.

“Home building may be ready to shake off its 2006 slump, as housing starts posted the biggest jump since January, according to a government report Wednesday. The report also showed that building permits, seen as a sign of builder confidence, fell more than expected.”

“But the housing starts number was seen by some as perhaps a signal that home building has hit bottom and is ready for a recovery. At the very least, the market appeared more resilient than many experts had assumed.”

According to the Census Bureau, home starts increased by 6 percent in September, which is some great news considering we saw declines in starts in the past six of seven months.

Housing, or project starts were at a pace of 1.67 million in August, and we saw that number rise to 1.77 million in September.

“While the 1.77 million rate is well below all the monthly readings from the second half of 2003 through the first half of this year, it's still a solid number. Only one month in the 10-year period from 1992 through 2001 had more starts.”

These mixed reviews of the status of home builders add even more confusion to the state of our housing market.
Are things getting worse, or better? It seems like we will never have an answer to this all-important question. We can only speculate until more numbers come in.

“The disconnect between the two numbers surprised David Seiders, chief economist with the National Association of Home Builders (NAHB), who said builders seemed to be working through a backlog of home permits they held for properties where they had not started construction.”

“Seiders said that a pick-up in building is not necessarily a positive for the market, which has seen the inventory of completed but unsold homes increase to record levels, pushing down prices and forcing builders to offer incentives to sell homes.”

Only time will tell what the future of our market holds.

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