GASP--there was a bit of good news in the sector! Housing Starts and Building Permits were up more than expected in June.
Privately-owned housing starts were at a seasonally adjusted annual rate of 629,000, up 14.6 percent above the revised May estimate of 549,000 and 16.7 percent above the June 2010 rate of 539,000. Building Permits were up 2.5 percent from May, a 6.7 percent increase from a year ago.
The big winner was multi-family, which admittedly is recovering from a low level and is only a small part of residential investment. Still, the report provides some much-needed good news for the construction sector and the economy as a whole.
But wait--there's more good news for home buyers and owners alike. The stalled economic recovery has pushed down 30-year mortgage rates to 4.5 percent, creating a great opportunity to lock in low prices and cheap rates. I discussed the trends on CBS television in this segment:
Before you bemoan the housing sector, don't forget these facts:
- Home prices doubled between 2000 and 2006, fueled by a massive credit bubble (hat tip to the Fed for watching idly as the bubble gained steam, but did nothing about it).
- The government's first-time and move-up home buyer tax credits created an illusion of a bottom. We now know that the program simply delayed the pain.
- Prices are likely to edge lower this year and bottom in 2012, but that doesn't mean that you should shun the market. In fact, now would be a GREAT time to buy a house, assuming the numbers work for your family.