US housing markets remain depressed

There was much discussion in the popular media of a possible US housing market upturn, during the blog’s visit last week.
It was based on news of a 17% rise in building permits during December, often a leading indicator of future demand. But as the above chart shows, from the American Chemical Council’s weekly report, the uptick is very minor in the context of historical volumes for permits (red line) and housing starts (blue).
The ACC’s experts add that even this rise is somewhat misleading. It appears to have been due to “homebuilders racing to get projects approved before building codes changed” in January. And they further caution that even so, the main strength was seen in the always more volatile multi-family sector.
This week’s news, of a further fall in the S&P Case-Shiller home price index, reinforces this caution. Prices have now been falling again for 6 months, and the Index chairman Index warned “a double-dip could be confirmed before spring” with prices in 9 of the 20 major US cities already below 2009’s lows.