More Evidence of a Bottom in Housing

While housing activity will likely remain subdued over the next year as inventory in the existing home market gets whittled down, the data below provides convincing evidence that the new home market bottomed earlier this year. From the peak in September 2005, housing starts hit a trough in April 2009, some 79% below its peak levels. Subsequent to that time period, total starts have risen a healthy 19.8% and single family starts an even more robust 35.0%. While permits and housing starts have firmly rebounded, homes under construction continue to hit new lows in November 2009, suggesting the new home market could experience a rebound in pricing over the next year, particularly if mortgage rates remain at rock bottom levels.