Housing starts accelerated in April to 1,032,000, from 954,000 the month prior, beating consensus of 940,000. Building permits also accelerated to 978,000 in April from 932,000 in March, ahead of consensus of 912,000. The jump was led by condominium and townhouse construction. Single-family home starts fell to a 17-year low. (Bloomberg)
These numbers continue the recent trend in which the data is not as bad as was previously feared. This is obviously fueling a strong market rally and adding weight to the theory that the worst is over. This is clearly possible–and the fact that the trend is spanning a broad segment of consumer spending reduces the likelihood that the housing numbers are an anomaly. But it also may be that the housing and consumer weakness is just taking longer than expected to work through the economy.