Thursday, January 17, 2008

Housing Market Downdraft - On Track

Construction has special importance as an economic variable, for a number of reasons. It tends to be one of the more cyclical components of, 'free markets'.

The current read is that new housing starts came in at 1006 thousand (about a million homes).

On my little housing model (that is needed if you are going to forecast GDP for 2008), this is consistent with the fall in housing that most have already forecast.

I was up at 1090 for the month. My figures guess at a bottom in May-Jul of this year.

I'd say that the pace of 'correction' appears a bit faster than I was projecting, except that permits, a more forward looking indicator, came in at 1068.

(caveat: most figures, including these, get revised. These "estimates", nevertheless, have a reality all their own, for investors and prognosticators. This series isn't known for exceptionally sharp revisions, however, as best I recall.)

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