Housing Starts Are Up, but That Means Nothing

The U. S. Department of Commerce reported earlier this week that housing starts for January hit a six-month high, growing 2.8 percent to an annual adjusted rate of 591,000 new units. Therefore the housing crisis is ending, we're told: end of story, if we build it they will come.

Not.

Housing starts refer primarily to building permits, which have to be in place generally before builders and developers can get construction financing -- financing that is very hard to come by in the current economic climate. So a start doesn't inevitably mean a finish nor even a true beginning of construction. There are other statistics for those -- statistics the Commerce Department in this case chose not to highlight.