The release that housing starts leaped 17% was initially viewed as optimistic by the CNBC slaves to the FED.  But new information that the number was a result of builders trying to qualify for government handout has even the CNBC folks backpeddling:

“But analyst Ivy Zelman gave me a huge nugget: 50 percent of sales in May were on spec. She says we’re seeing a lot of spec homes now because, “today’s consumer wants to touch and feel the house.” The positives are that cancellations are down, sales are better and there’s less negative pricing, although discounts are still prevalent. “The patient was without a pulse in the fourth quarter,” Zelman notes, “and now the patient’s in ICU.”

So why all the spec now? Because builders are trying to jam all these homes into buyers’ pockets before the expiration of the $8000 first time home buyer tax credit. It turns into a pumpkin November 30th.”

Diana Olick, CNBC Real Estate Reporter apologizes:” I’m not trying to be a bear here, just a pragmatist.”