jim s.

The Upside of Low Housing Starts

I agree that another steep drop off in housing starts is sensible and necessary but lets remember that homebuilders make their living building homes. If the homes that they're able to build are selling for less, that doesn't bode too well for their profitability. The question is how many of them can sit on their hands for a year or two or more without the creditors knocking on their door.

While one can look at the starts and permits numbers and say they're an indicator the builders are doing the rational thing, had the numbers shot up instead I think homebuilder stocks would have shot up too.