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By Jason Stipp | 03-21-2012 11:00 AM

Housing Highs, Lows, and New Normals

Morningstar's Bob Johnson puts recent new home, existing home, inventory, and home price data into context.

Jason Stipp: I'm Jason Stipp for Morningstar.

We got a boatload of housing data over the last few days, which can make it difficult to pull out some of the bigger themes in the home market. But luckily, we have Morningstar's Bob Johnson, director of economic research, to give us the rundown and the walkthrough on recent housing numbers.

Thanks for joining me, Bob.

Bob Johnson: Great to be here.

Stipp: Let's start by talking about some recent trends that we've seen that cause a little bit of confusion around the year-over-year and the month-over-month numbers that economists like to track for housing data, but you have to take some things into consideration. What are those?

Johnson: You've got to be really careful about looking at the numbers in too short of a time span, because of the weather in particular. And one of the things is, we've had a couple of warm months in a row, so it's brought forward some of the housing data, and the season started a little bit earlier, which makes some of the subsequent months look a little less rosy.

So our usual way around that is to look at the data year-over-year and that gets rid of some of that stuff, but unfortunately, last February was an unbelievably cold winter, and so people couldn't get out to look at homes, and builders couldn't get out to dig basements to homes. So that makes it probably just a little bit too easy a [comparison] metric. So it gets very confusing right now to interpret the data.

Stipp: What about if you looked at a longer period like three months this year compared with last year. Are you seeing some sort of trends that are optimistic at all?

Johnson: Absolutely. I think even if you start looking over a three-month range and year-over-year, you are seeing some pretty nice improvement, and I think we are well off the bottom here.

Stipp: OK. So, let's talk about some of the recent data that we've had, because we've gotten a lot of different bits of data, and when you get it month-over-month, it's hard to really pick apart and see where are we right now in the recovery.

And I want to start with new housing. This is an important one because it does contribute to GDP with new construction. What have the recent numbers said to you? You have it broken out here: What we've seen recently, what we saw during the downturn, and what some of the peaks have been. Put that in context for us on new housing.

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