Beware False Housing Hopes

Sure, construction starts rose in May. But the key indicator of permits fell for the fourth consecutive month and homebuilders are gloomy

It looked like there was finally a bit of good news in the housing sector, when the government on June 20 announced a rebound in home construction for May. But dig into the data, and the picture for housing is only getting worse. Permits for construction—a better indication of where the market's headed—continued to decline. Homebuilders are getting increasingly pessimistic, according to a survey that was released June 19 and is more up-to-date than the government data. And homebuilder stocks are continuing to slump.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.