According to Adrian Wojnarowski of Yahoo! Sports, Houston still has interest in the All-Star center.
The Rockets refuse to give up on the Dwight Howard derby, gathering more assets to try and entice the Orlando Magic to engage in talks— Adrian Wojnarowski (@WojYahooNBA) July 10, 2012
If Howard won't sign an extension in Houston long-term, then both sides have no reason to even begin talks. The Rockets cannot afford to make a trade for Howard without an extension—it's a risk no franchise can take.
Does it make sense for Houston to pursue Howard?
Howard is the ideal target because of the team's need for a center. However, the situation just isn't a favorable one for Houston.
The Rockets' pursuit of Howard should prove to fans that the franchise is being aggressive in order to improve the team and acquire star players to win titles.
Instead of chasing Howard, the plan for the Rockets should be to see how their young players develop this season and decide whether or not to trade some of them for a star at the trade deadline.
It would be foolish to give up on these young players before the team is able to determine if any of them will be franchise players.