Hold Your Applause for Housing Permits and Starts

(MoneyWatch)  You could almost hear the cheer above the St. Paddy's Day roar from housing advocates, economists and builders at the news from the U.S. Census Bureau that the number of building permits rose an unexpected 3 percent last month. "Soaring," was the term of choice for some TV pundits. It's the kind of good news the housing market hopes journalists and bloggers will talk about -- as if spreading good cheer will somehow put the housing market on terra firma, or at least juice the stock market (which it did).

And yet, all that cheering somehow ignored the fact that the actual number of new building permits is actually 44 percent lower than in February 2008. The seasonally adjusted annual rate now stands at 547,000, or roughly half what it was during the peak years.

According to the Census Bureau's report, housing starts (the number of home-building sites where construction work began) were up more than 22 percent from January, a decent increase. But the year-over-year number is down 47 percent to an annualized rate of 583,000.

So what does it all mean?

Since the last few years were anything but normal for home builders, a look back is in order. If you rewind the housing clock, five years ago the Commerce Dept. reported that total housing starts for 2003 totaled 1.848 million units, the highest number in 25 years. And it was more than three times the number of starts generated last month. You could call it the peak of the new-construction housing boom.

That's a lot of folks who aren't earning big bucks building houses.