Starts are moving up, but the increase in completions has just started
Privately-owned housing starts in September were at a seasonally adjusted annual rate of 872,000. This is 15.0 percent above the revised August estimate of 758,000 and is 34.8 percent above the September 2011 rate of 647,000.
Single-family housing starts in September were at a rate of 603,000; this is 11.0 percent above the revised August figure of 543,000. [...]
Privately-owned housing units authorized by building permits in September were at a seasonally adjusted annual rate of 894,000. This is 11.6 percent above the revised August rate of 801,000 and is 45.1 percent above the September 2011 estimate of 616,000.
Single-family authorizations in September were at a rate of 545,000; this is 6.7 percent above the revised August figure of 511,000.
And the growth in housing starts should continue. My estimate is the US will probably add around 12 million households this decade, and assuming no excess supply, total housing starts would be 1.2 million per year, plus demolitions and 2nd home purchases. So housing starts could come close to doubling the 2012 level over the next several years - and that is one of the key reasons I think the US economy will continue to grow.
As can be seen from the chart that leads off this post, however, getting back anywhere near the normal, non-bubble residential level of construction will require a lot more climbing out of a deep, deep hole.
Nonetheless, while news about housing is still grim in many regions of the country, and millions of families are hurting because of it, other housing activity is improving along with construction starts and completions. For instance, foreclosure activity, which has dogged the housing market for four years, is down to its July 2007 level. Moreover, housing prices seem to have reached bottom in many markets.