{"id":203583,"date":"2010-01-20T10:01:00","date_gmt":"2010-01-20T15:01:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/less-housing-starts-was-actually-good-news-2010-1"},"modified":"2010-01-20T10:01:00","modified_gmt":"2010-01-20T15:01:00","slug":"remember-the-crappy-housing-starts-number-was-good-news","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/203583","title":{"rendered":"Remember, The Crappy Housing Starts Number Was Good News"},"content":{"rendered":"

Calculated Risk<\/a> reminds us that December’s falling housing starts, reported this morning<\/a>, was actually decent news, in the sense that less new starts means we can work down the total inventory of excess housing faster.<\/p>\n

As I’ve noted before, this is both good news and bad news. The good news is the low level of starts means the excess housing inventory is being absorbed – a necessary step for housing (and the economy) to recover. The bad news is economic growth will probably be sluggish – and unemployment elevated – until residential investment picks up.<\/p>\n

Sure, there is a negative side in that fewer starts means less work for homebuilders, but we can’t have our cake and eat it too.<\/p>\n

So more accurately, perhaps the decline in new starts is good news for anyone concerned about housing prices, while bad news for anyone who works in the industry and needs income in the near term.<\/p>\n

Overall, as Calculated Risk highlights, if the overarching housing problem is that too many houses were built during the boom, then we should want new starts to slow down, as a long-term fix. This is healthier than rooting for even more housing supply to be created just to give us a short-term jolt of economic activity.<\/p>\n

Check out Calculated Risk’s full analysis here >>><\/a><\/p>\n

\"Chart\"<\/p>\n

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