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Housing continues its recovery




March Housing Starts came in below expectations by a sizable amount, but I don't think that's a reason to think that the nascent housing recovery is dead. To begin with, March starts were still 37% higher than their 2009 all-time low, and still 10% above a year ago. Second, starts are a volatile series, and seasonal factors can contribute to that volatility in the winter months when starts are typically low.


But this chart of Building Permits helps clear things up. March Permits were well above expectations, and as the chart above shows, they are on a tear—up 46% from their 2009 low, and up 30% from a year ago. Seasonal factors have probably distorted this number as well, but between the two, the picture is still one of recovery. After all, permits come before starts.

Permits and starts track each other tightly over time, and you can see that in the last chart, with starts in orange and permits in white.


In my view, there is no doubt that the housing market continues to recover, even though activity is still at very low levels from an historical perspective.

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