Housing: Good news among the Bad?

Over at Calculated Risk, the economics blogger Bill McBride is trying to sort out exactly how bad the situation is in the housing sector.  Sorting this out is important because one of the things an economic recovery depends upon is demand for housing eventually outstripping the supply and leading to new construction with all of the employment and purchasing that generates. 

McBride started this analysis by trying to get a handle on the number of new homes that have actually been completed in the past year to get a handle on how long the pipeline of unsold houses is likely to be (and consequently, how long it will take before that inventory is drawn down and new construction activity can really kick in).

He finds that the numbers for completions for single-family and multi-family housing are way down, in fact, the number of housing completions in 2010 will probably be a record low.  But, in the current context, this may not be such a bad thing:  “To be clear – the record low completions is bad news in the short term, especially for employment, but overall it is GOOD news for the economy and housing since it helps reduce the excess supply.”  It is amazing what passes for good news these days.

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