Has Housing Hit Bottom?

Has housing hit bottom? It is much too soon to make this call. Recent housing numbers were influenced by weather. December and January were colder than normal in the Northeast and Midwest, and February was warmer than normal in the Northeast, and about normal in the Midwest. Temperature swings will swing the housing numbers, and the seasonal adjustment factors will augment these swings. On top of this, February was the eighth driest February in the 1895—2009 period, according to the National Climatic Data Center, the government agency within NOAA that monitors climate. Drier than normal weather during the winter months can also make the housing numbers spike. One key statistic pointing to “better-times-ahead,” however, bears watching. Last week, the Census Bureau reported that single-family housing permits (which are not influenced by weather as much as other housing numbers) increased 11.2% in February, but today, it revised this increase to 16.1%. Until we get another two positive readings on single-family housing permits, at best we can say that housing has likely hit an inflection point. An inflection means that the market is shrinking, but not in collapse. –Patrick Newport, IHS Global Insight