First off, let’s get one thing clear: “Housing starts” isn’t in fact a typo version of “housing stats.” It’s actually the term for many new homes are being constructed, as determined by the number residential construction permits issued in a month. Housing starts are also (you guessed it) an economic indicator. Nowadays, what isn’t?
It’s Good—But Not Too Good
Economists are chattering with excitement now that housing starts have hit a five-month high. Clearly, more construction is a good thing for the economy. But don’t get your ties in a twist just yet, warn the token cautious economists. They’ve taken it on themselves to warm us that a five-month high is still pretty insignificant as compared to the housing market of yesteryear. And that it only complicates the foreclosure mess. And that foreclosure mess plus tentative housing starts success equals possible housing setback before the year is through. It seems as though they’ve taken it upon themselves to be cautiously pessimistic.
We’ll Take The Optimistic Side
One of our favorite quotes out there, from Reuters:
A survey on Monday showed sentiment among home builders edged up this month, but remained at depressed levels.
Yes, we’re quite aware that things aren’t all sunshine and smiles. But between the good news trickling in about third-quarter earnings and the word “high” in articles about the economy, we can’t help but be a little optimistic. This isn’t an inspirational movie—we don’t have dramatic events and overjoyed tears to mark every stage of the plot…so cautious economists, just give us this one.
Tell us in the comments: Are you chattering or cautious?