Housing starts went up unexpectedly in February (+22.2% from January), but were still down 47.3% from February 2008. And while to some this might trigger some hope that we’re reaching the bottom, as the Chicago Tribune and other papers around the country have noted, most of the gain came from the multifamily sector, which includes apartments and condominiums. Starts in that sector rose more than 80%; single-family homes only gained 1.1%. On the bright side, that 1.1% is an improvement over the double-digit drops we have been seeing the past several months.
Economists are mixed as to whether the slight uptick in single-family homes signals some sort of bottom in the housing market.
Still, the National Association of Home Builders issued this sobering statement: "While welcome news, this gain only reflects a modest rebound from January, which was the worst month in history for new-home production." The NAHB Chairman said: "Builders did pull a larger volume of single-family permits in February, suggesting a glimmer of hope for the prime home-buying season, which is near at hand." He goes on to say that there is still a lot of inventory that needs to be worked down as foreclosures continue to flood the market in many areas.
Despite the reality check many are giving, perhaps the positive numbers are at least in part restoring some badly needed consumer confidence in our battered economy.”