• The absolute construction starts numbers are big -- a combined total annualized 1,099,000 new units -- but roughly the same as rock-bottom in each of the last five recessions.
  • No inventory is a reasonable situation early in a recovery after a bad bust. It takes a while to get the engine going -- labor, land and materials.
  • Sustained increases in price should have fixed all of the usual problems and have not.

My beloved business partner of 20 years kept a few cartoons on her office door. The top one had a living room scene with a middle-aged couple on a sofa and opposite chair. The wife is speaking, and her caption: “Harold, I married you for your money. Where is it?” U.S. recession and recovery cycles from World War II until 2000 were clockwork affairs. The Fed, worried about inflation, would raise rates until housing cracked, followed by a recession and rising unemployment removing the inflation risk, which was followed by lower rates and strong housing recovery, pulling the entire economy ahead. Construction starts in January of new single-family homes were up 3.5 percent from one year ago, but multi-family ones fell 2 percent. A pokey show. The absolute numbers are big, a c...