When the U.S. Census Bureau's Oct. 18 report on monthly housing starts showed an increase in September, it was a clear call for sanity in the midst of all the hysteria in the financial press about the conditions of the housing market.

Although the building craze in most markets has slowed, September's housing statistics may prove that the downturn may not be as deep or as widespread as previously anticipated by Wall Street wags.

Nationwide housing starts in September regained the ground lost in a steep decline the previous month. September housing starts rose 5.9 percent to a seasonally-adjusted annual rate of 1.77 million units, in close alignment with July's 1.76 million-unit rate and the third quarter's average of 1.74 million units. Single-family starts were up 4.3 percent to a rate of 1.43 million units, while multifamily starts were up 12.7 percent to a rate of 346,000 units.

As the nation's publicly owned homebuilders have learned in recent weeks, it's a short ride on Wall Street from the penthouse suite to the sub-basement. With their focus on quarter-to-quarter earnings, stock analysts seemed to have forgotten that the housing market supported the U.S. economy during its most recent recession in 2001-2003, and that historically speaking, more homes are being built now in the United States than at almost any other time in the past decade. According to a recent report by CNN/Money.com, although the most recent monthly rate is still well below all the monthly readings from the second half of 2003 through the first half of this year, only one month in the 10-year period from 1992 through 2001 had more housing starts.

All of the increase in housing starts was registered in the South and Midwest, where relatively good weather conditions apparently encouraged builders to draw down their backlogs of unused permits, said National Association of Home Builders (NAHB) Chief Economist David Seiders.

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