Does the Increase in Housing Starts Mean We're Heading Toward Recovery?

According to the number of building permits applied for in June, which is an indicator of future building growth, June has marked the highest amount of applications since September of 2008. Building permit applications are up 14.4% in June from figures reported in May of this year. Is this an indication that the housing and lending market is starting to make a comeback?

It does infer that things are starting to turn around, but since it took years to get to this point, it will likely take years to turn the bad back into the good. For one thing, lenders have to get the foreclosure rate under control. Some lenders are using recovery alternatives such as loan modification programs to reduce the amount of foreclosures--keeping mortgage income in place for the lenders and homeowners in their homes.

Second, after the foreclosure rates are reeled in, the flow of credit will have to start streaming from lenders to borrowers to truly restore the market. Lending money is one of the stimulants to the economy that has the ability to put this shaky economy back on solid ground.

Housing starts are up 14.4%, which is a step in the right direction, but it is certainly not the end all and be all or the resolution to the lending and housing market problems. But, it has to start somewhere so it might as well be here.