Are you kidding me? Talk about looking for the negative.
"Housing Starts Fall to 10-Month Low" reads the
New York Times Reuters headline. But there are two big problems with the story.
Here’s the lede:
U.S. housing starts and permits for future home construction unexpectedly fell in June…
And here’s the reality: Yeah, housing starts in June were down from May (month to month), but — and this is the important part — they were up significantly from the year before. (To be fair, probably up. These are preliminary numbers and so they have a big plus/minus.)
I’ve said over and over that year-to-year results mean a heck of a lot more than month-to-month. And yet Reuters focuses on the short-term number. (True, it’s the lowest level in — gasp! — 10 whole months.)
Even Realtor magazine jumped on the short-term-view bandwagon with "New-Home Starts Take an Unexpected Dive." Its story focuses on a different negative aspect:
Builders started construction on fewer new homes than expected in June…
Than expected. The issue being that economists had predicted — using entrails and tea leaves — that there would be more construction than there was. And that’s apparently bad news.
That’s like predicting a baseball team will win 110 games, and, when they only win 98, calling it a losing season.
Even worse, if you bother to read the article you see that home builders — the folks on the front lines of this — aren’t just optimistic about the market — they’re the most optimistic they’ve been in seven and a half years.
Oh, and the Federal Reserve is also optimistic ("upbeat" said Reuters) about residential construction.
So let’s make sure we’ve all got this straight. When you see this:
Think forest, not trees.