Last month I floated the idea that the housing market had hit its bottom. The two things I saw were: a December increase in housing prices as measured by the OFHEO, and a January decrease in the PPI for residential construction that was a lot less than it had been in prior months.
I noted that, lacking any additional data, these could be "aberrations."
Today I see two more data releases that add to the likelihood of this possibility: the PPI for residential construction fell even less in February, and housing starts increased in February for the first time since June 2008. The increase was across-the-board: seasonally adjusted and unadjusted, both single family and multi-family homes, and all regions except the West.
More boldly I said in December that I "expect to see housing construction resume next summer, if not earlier." I am sticking to that prediction.
The chart below shows why I think the construction PPI has been evolving differently so far in 2009.
click to enlarge