The housing starts data released this morning was a welcome sign that, at the very least, the level of housing starts is bottoming. Starts follow transactions and while no boom is in the offing the National Association of Realtors Pending Home Sales Index points to more starts to come (see chart below). Home prices are also bottoming and beginning to rise, however modestly, based on my work with Radar Logic house price and transaction data.
The chart illustrates monthly single-family housing starts and the pending sales index lagged four months. Judging from the upturn in pending sales and the high likelihood that even more sales were put into the docket in June, the improvement in housing starts reflect an upturn in the trend rather than a blip in the data.