The rise in housing starts has been impressive, with starts running close to 40 percent above year-ago levels. Of course this increase is against an extremely low level, with starts having fallen to less than 30 percent of their bubble peaks in 2009 and 2010. The Midwest also looks comparatively good in this category with starts near half of their 2005 peaks, whereas starts in the other regions are closer to 40 percent of the 2005 peaks.

The best indicator of the future path for starts is the vacancy rate. This has fallen substantially from 2010 peaks, even though it is still much above the pre-bubble level. Housing has contributed an average of 0.3 percentage points to GDP growth over the last year. This contribution is likely to continue and possibly increase slightly in 2013.

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For more, check out the latest Housing Market Monitor.


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