Try not to step in it today, housing bubble watchers. Once again, the real-estate cheerleaders and compliant "journalists" out there will be trying to put lipstick on the pig with the bogus headline of the day. It will read "Housing Rebounds," "Home Starts Up," or some other nonsense.
Don't fall for it.
The "improvement," as usual, is made by comparisons to the prior month -- in this case, February to January. That's a bad way to do comparisons, as it doesn't account for seasonality. Worse yet, the reported 9% "increase" over January is subject to an error of plus or minus 10.2%, which means there's no way to judge whether it's an increase or a decrease.
What's completely unambiguous is the giant drop from last year's February numbers. Housing starts in February 2007 were 28.5% worse than in February 2006, with a margin of error of 6.2% in either direction. Worst-case scenario, housing was down 34.7% -- at best, it was down only 22.3%. (Full details here.)
That's why homebuilders like Hovnanian Enterprises
While this crowd, along with the National Association of Realtors, does its best to convince you that now is the "time to buy," I suggest you wait for the credit crunch to really play out, and the massive speculators' inventory overhang to hit the market. When ARM-driven foreclosures really hit their stride and desperate home "investors" are selling their McMansions at 50 cents on the original buck, that will be the time to buy.
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