Housing Starts Increase: A Bet on the Spring Tax Credit?
John Lounsbury submits:Builders appear to be hoping that the spring home buyers' tax credit will boost new home sales. The latest data from the U.S. Census Bureau reveals that in January privately owned housing starts increased by 2.8% from the prior month to an annual rate of 591,000. To qualify for the credit contracts for sale must be entered by April 30 and closings must take place by June 30. Since it takes 4-6 months to build a new house, construction must be started that far ahead of June to make the deadlines.December data showed that housing starts were rising as new home sales were falling. The rationale for that was (1) sales were showing seasonal declines while (2) builders were looking forward to the seasonal selling season of spring and early summer and (3) anticipating increased new home sales boosted by the new tax credit.Complete Story »