Housing Starts Rise 8.2%

Housing starts rose at a higher than expected pace of 8.2%. The rebound in housing starts was mostly due to increases in condo and multi-family construction. Starts on US single-family homes dropped 1.7% from March to the lowest level in 17 years. This news is being greeted with cheers from the market, which is pointing higher before the opening bell. You know what I was just thinking? What we really need today is a few more condo projects to add to the glut of inventories. I sure hope some of those condo starts were in San Diego where the glut of inventories at today's sales pace would take 12 years to work through. Or maybe in Miami, where it is 16 years long. The market rightfully should ignore the fact that lending standards continue to tighten, delinquencies are rising, and sales are still moving at a snail's pace in most parts of the country. It should pay attention to the enthusiasm of homebuilders, who are still breaking ground on new projects, despite their inability to unload the garbage sitting on their books. My guess is that some of the new condo projects started this month will end up in the "uncompleted condo project" statistic in a year. There's an indicator that the Commerce Department should consider adding to the report.