I must confess that I find Jim Cramer entertaining and, on occasion, even illuminating. The key is to Tivo his show and fast forward through the less-than-illuminating parts. That can trim an hour show down to ten minutes or less.
The highlight of Tuesday night’s show was Cramer’s declaration that the housing market had reached bottom. His evidence? Tuesday’s data on housing starts, which came in stronger than expected. That prompted me to take a closer look at the data. Here’s a chart of single-family housing starts since 1970 (when the data begin):
As the chart shows, Cramer may be on to something, at least as far as starts are concerned. Single-family starts bounced around the 360,000 level (at a seasonally-adjusted annual rate) in January through March, rose to 373,000 in April, and hit 401,000 in May. It’s been more than two years since we’ve seen starts increase that much.
That’s good news, but I think we should still expect further pain in housing.