The March housing market reports were uniformly better than the grim reports for February. And the January and February reports were revised slightly higher for permits, starts and sales after a reassessment of seasonal adjustment factors during the harsh winter. Nonetheless, housing has not gotten off to good start in 2011. So far new home starts are 10% below the same months in 2010 and new home sales are off nearly 20%. For comparison, spending for new home construction year to date is down 7%, half of the 14% drop for nonresidential construction but well below the 4% gain for heavy construction.
The year/year dip in the housing market is an unfair comparison with the period when the homebuyer tax briefly caused a surge in the market which was not sustained. Housing market activity should be seen as flat for about two years — still waiting to break out of the bottom of the housing recession. That is now expected to happen this spring.