But to my feeble mind the notion that low housing starts is bad for housing makes no sense. New housing is the last thing we need with high inventories. The fact that housing starts are low and staying that way can only help in soaking up the overhanging inventory of existing homes.

As far as the market is concerned, I think the Fed will keep the lid on interest rates until we are into a recovery. In many ways we are still in deflationary mode, so I’m not as worried about the debt that is being taken on. The biggest mistake Hoover made was NOT spending money when the Great Depression took root. The Fed is doing the right thing and as much as you hate to hear it – so is the Obama Administration. However, once recovery starts – the Fed will have to take away the punch bowl before a hint of a party starts. They will start to tighten and that will keep housing prices down for some time to come.

Heck, we don’t need the market of 2005 again – GOD FORBID!!! Please! I have a dream….Just a normal health bubble-free market when we finally do recover.

I’m more than happy we may have hit bottom. Because my biggest fear was next he’ll want to nationalize my house.

I’m going to side with Lani on a lot of this. Home sales (and as an after-effect, building activity) are picking up due in large part to two temporary economic incentives which likely won’t be here next year: ridiculously low mortgage rates and the first-time buyer tax credit.

At this time next year I would be shocked if rates were as low as they are. I actually think we’ll have to pay the piper for the Fed’s rate cutting preventative measures and deal with some rate inflation the next few years.

And the tax credit likely won’t be here next year, either. And even if it is, odds aren’t good it will be as effective as it was this year since most first-time buyers who were eligible to purchase this year did just that. We’ve sold forward at least a year into our inventory of first-time buyers, I’d argue, and the ongoing recession means far fewer of them will be created next year due to a weak job market.

All of the excitement seems premature.

The most dangerous thing we can do as a nation is behave as sheep fighting to fit into another bubble, so why would we note a 1% increase (also known as a 29% DEcrease year over year) as a “jump” or “revival” in the market when really it’s just a step back in the right direction that may or may not indicate a potential uptick? It’s hype. We’re still flat lining here and consumers having a false sense of hope is as dangerous now as it was before the LAST time this got all jacked up.

PS: thanks for commenting, it’s awesome to see you at ol’ AG!

With that in mind, you don’t hear tech analyst bemoaning the modest growth in the web sector because it is a factor of magnitude smaller than what it was in 1999. So get used to it, the market was inflated and now it is correcting. New starts are going to grow at a slower clip- and that is a good thing.

Her points of course, are well taken. I also was pleased to see the media called traditional instead of mainstream, as they haven’t been mainstream since LBJ has been in office. Lamestream would be more genuine.

As Benn says, it’s the economy stupid — with jobs as #1. If Obama gets what he wants in any substantive way, game over.

Fannie/Freddie rules keep getting more and more anti-recovery at every turn. It reminds one of the Fed’s suicidal actions in the 1930′s — shrinking money supply while simultaneously raising interest rates — in a freakin’ depression.

Good stuff, Lani.

No, we shouldn’t get too excited about just a little good news. But we shouldn’t poo-poo it either. It could be the beginning of the end, which we all hoping for. To some extent, good news breeds more good news by creating confidence. Let’s not be the “Debbie Downers” that stand in the way of a positive attitude turn around.

I just wish we could find someone more credible than Lawrence Yun to stick on the TV to represent the Realtors interpritation of housing market! He’s sort of the poster child of Pollyannaism these days.