“Good” news on housing starts
U.S. housing starts hit 10-year low in July; permits also lower – MarketWatch
Outside of the actual home-builders, I consider this good news. To get housing started again, the first step will be to bring down available inventory to more closely match current demand.
I think demand will pick up quicker than most think. A figure I saw was that California alone adds 400,000 new households a year. Also, the permitting and building of new homes is not a quick process, so once demand starts to pick up, it will take a while for the home-builders to be able to ramp back up their numbers of new houses.
Right now we have a perfect storm of too much inventory and extreme tightness for mortgage lending. Once the crisis du jour crowd has let up on the good mortgage companies, they will start lending again, and people will be able to buy houses. Just as currently, selling begets selling, a buying cycle will be upon us before most recognize it.
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