One very important data point from the Housing Chart Package is the strong recovery in Home Builders Sentiment. Released earlier this month, the NAHB/Wells Fargo Housing Market Indicator (HMI) has increased from 16 one year ago to 40 today. The HMI leads single family housing starts by 3-5 months, so expect a rapid exceleration in Housing Starts over the next few months - after total housing starts have already been running at 20%+ Y/Y growth rates already.
One reason that Homebuilders have been feeling better is that Home Prices have stopped declining. It is tough to build a spec house and have the price drop 5% over the time you are building the house - putting tremendous pressure on profit margins.
Now that 6 years have passed since the bubble burst, expect home construction to grow at double digit rates for the foreseeable future - turning that massive headwind into an economic tailwind.
Now that 6 years have passed since the bubble burst, expect home construction to grow at double digit rates for the foreseeable future - turning that massive headwind into an economic tailwind.
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