Today S&P and OFHEO release their housing price indices for December 2008. But one of the important determinants of those prices is construction cost. Last week the BLS released its JANUARY PPI for residential construction. It fell 0.4 percent, as compared to the declines in excess of 1 percent (that's a lot for just one month) for each of the previous three months.
Unless the January PPI is an aberration, it looks like housing prices and housing construction are about at the bottom. I am sticking by my earlier prediction that housing construction will resume in spring/early summer 2009.
Interestingly, the OFHEO said today that housing prices increased in December for the first time in 11 months and only the second time in almost two years. When measured relative to construction costs (which fell a lot in December), housing prices increased even more in December.