I said a coupla weeks ago here and here that it looked as if housing was finally starting to recover in the US. The June housing starts number (out on Thursday US time) was better than expected and, what was as significant, previous months' data were revised up, always a sign of a strengthening economy.
Starts have a long way to go before they reach even the recession lows of previous cycles, and remember, the US population has grown substantially over the last 30 years. Nevertheless, they've started a sustained rise. Now, housing construction is a small part of the economy, but it fluctuates a lot and so it can contribute a much larger percentage of the actual swing in overall output and incomes. Also, when peopl buy new houses, they also tend to buy new white goods, curtains, and other semi-durable goods. House prices have stopped falling, and may even be rising slowly; the mortgage rate is at decadal lows; housing starts are rising. A virtuous circle which will help support the economy. Alas, it needs this support: my coinciding index is flat, retail sales and employment are flat or barely growing, Europe is cactus, and China is only just really now putting the pedal to the metal.
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