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Huge Jump in Housing Starts Does Not Point to Solid Recovery

By: Diana Olick

How could anyone take pot shots at a nearly 15 percent monthly jump in anything, not to mention housing starts, which have been mired in the mud for ages now?

Apparently pretty easily.

I knew the moment I saw the number that there would be those arguing that any gain in new home construction is a negative because of the already bloated inventory of new, existing and foreclosed properties on the market.

While single family starts were up over 9 percent, it was multi-family driving the train in this report, up nearly 32% month-to-month. We all saw that coming, as rental demand has been surging, and there is not near enough supply in the pipeline. Patrick Newport of IHS Global Insight sees today's report as highly predictive of housing's slow slog back.

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