This article originally appeared on Jan 28, 2014 on RealMoney.com. To read more content like this plus see inside Jim Cramer's multimillion-dollar portfolio for FREE... Click Here NOW.
A number of highfliers will report their quarterly results this week, and one sector that we should note is the domestic housing market.
Single-family housing starts have been well over the 600,000 mark for the last three reported periods (October through December 2013). Some would argue that the winter weather in December weighed somewhat on the industry, but I believe that far more people would agree that the hard winter weather we've experienced in January will have a far greater impact on the housing industry. The combination of snow and below-freezing temperatures will stall housing construction, and we'll see that when the January housing data get reported.
Weather aside, Markit Economics' flash U.S. purchasing managers' index reading was weaker than expected, as were holiday sales, and the combination raises questions about whether we have seen the top in housing. One perspective says that we have not, and that is the month's supply of inventory component on new-home sales. According to the National Association of Home Builders, that figure stood at 4.3 months at the end of November (the most recent month for which the data are available) -- near the lower end of the range for the prior six months.
For the larger overall single-family housing market, which includes both new construction as well as existing homes, inventory levels rose modestly year over year in November -- up to 5.2 months, from 4.9 months in November 2012 -- but a longer view shows that the 5.2 figure is well below six-year levels.