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Bloomberg Econoday offers a mostly optimistic outlook.

Last month's starts and permits data were one of the big disappointments for the housing sector in contrast to today's report for April which is one of the most positive reports so far this year. Starts rose 5.7 percent on the month to a higher-than-expected annual rate of 1.235 million while permits gained 0.6 percent to 1.296 million which is slightly higher than expected. But the battle is still uphill for housing as year-on-year comparisons show: at minus 2.5 percent for starts and minus 5.0 percent for permits.

Yet April's improvement in starts is convincing, up 4.7 percent in the month for multi-family units to a 381,000 annual rate and up 6.2 percent for single-family homes to 854,000. These results, especially the latter, mark an auspicious opening to second-quarter residential investment which in the prior five quarters pulled down GDP.

Permits, however, are mixed with single-family homes down 4.2 percent in April to a 782,000 rate but multi-family permits up a very sharp 8.9 percent to 514,000. Total permits in the West, where housing has been flattening dramatically, offer especially good news with a second strong monthly showing of plus 5.3 percent to a 339,000 rate which is still down 2.3 percent year-on-year. And permits in the South, the largest region, keep falling, down 1.2 percent for 10.7 percent annual contraction.

Low mortgage rates have yet to trigger much response from home builders on the permit side though improvement underway in home sales and gains for mortgage applications are positives for the demand side. Last year's Spring housing season proved perhaps the greatest disappointment of the 2018 economy but the 2019 season looks more and more positive.

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Housing Starts 1959-Present

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Housing starts don't exactly look strong. Population-adjusted they would look much worse.

Mike "Mish" Shedlock