The surge in activity is a lagged response to the strength of new home sales, and with mortgage demand now well off its highs -- though still strong -- it probably can't last, ... But there is no reason to expect an immediate plunge, not least because permits rose again in February, for the fourth straight month.

By early next year we expect starts to have begun to decline, though activity can probably remain close to current levels for another couple of months,

A serious downturn in housing activity will have to wait until there is a meaningful increase in mortgage rates, ... For that, we have to wait until payrolls take off and the Fed signals tighter policy.

The Chicago survey is very susceptible to changes in conditions in the auto industry, where activity has been very volatile in recent months.