You probably remember the line about porridge from Goldilocks: It wasn't too hot, it wasn't too cold, it was ... just right.

Well, you could make that point about some of the latest housing and real estate numbers.

Last week's new housing starts were reported by the media as further evidence of the deep hole the home building industry is in: Starts were up by barely half a percent nationwide, and permits for future construction were down.

But is that "cold," or maybe something else? If you dig below the anemic sounding half a percent gain, you discover something very different: New starts by builders on single family homes were actually up by nearly four percent for the month nationwide.

It was multifamily apartment starts, which are notoriously volatile and jump around every month, that were down bigtime -- by nearly 16 percent.

Now a 4 percent gain, combined with lower permits, are hardly dramatic enough to say new home building is heating up. Then again, they're definitely not stone cold.

Home builders are building, just at a modest pace.

So maybe the starts and permits numbers are somewhere in "just right" territory. Lawrence Yun, chief economist for the National Association of Realtors, suggests that modest gains in production might be the best way to go at the moment.

If builders start new units too fast, they'll most likely add to their inventories of unsold houses. But if they stop all starts, they'll go out of business and tens of thousands of jobs in building components, appliances and construction will be lost.

Far better to keep it "just right."

Now, on a more sobering and unexpected note, hopes for an early signal from the Obama administration that it supports an extension of the $8,000 home buyer tax credit encountered a setback last week. HUD Secretary Shaun Donovan told a Senate committee hearing that the White House is not yet on board.

Though builders and Realtors have presented strong statistical evidence that the credit has been a major contributor to economic growth this year, Donovan said the program is costly to the federal Treasury, a key negative at a time of soaring federal deficits.

Donovan added that it would not be "catastrophic" if the credit were allowed to die as scheduled November 30.

Meanwhile, the mortgage market continues to be attractive to anyone buying a home: Rates last week on 30 year fixed loans averaged just above five percent, according to the Mortgage Bankers Association, while 15 year rates averaged four and a half percent.

Published: October 27, 2009

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.