The current housing recovery is not a house of brick, but a house of cards.
The cards came tumbling down this week, as the U.S. Commerce Department reported that housing starts in June fell to their lowest level in almost a year. At June’s pace, new housing starts would total 836,000 for the year, down 9.9% from May’s 928,000 pace. Multi-family projects plunged 26.2%.
The announcement blunted the stock market rise initiated on Wednesday by Federal Reserve Chairman Ben Bernanke, whose warm-and-fuzzy comments (more fuzzy than warm) can be summarized as “we have no idea when quantitative easing will end and, even if we did, we wouldn’t say.”