The latest newsletter from Goldman Sachs US Economic Research just arrived in my inbox, with this to say:
The point of maximum deterioration in housing activity has probably passed. The sharp downturn of the past year seems to have brought total housing starts single-family starts, multi-family starts, and mobile home shipments close to the level justified by the underlying demographics (as best we can measure them).
This is not to say that residential investment will stop falling anytime soon...
Still, the fact that the US economy has bent but not broken during the fiercest onslaught of the housing downturn is encouraging. It suggests that real GDP growth probably bottomed for the cycle at the 1% (annualized) pace that we now estimate for the third quarter of 2006. While the headwinds from the direct and indirect effects of the housing bust will remain substantial, a sequential pickup in real GDP growth is now likely.
Yeah, that's what I was thinking.