Weather or Not, Housing Market Results Are Still Cold as Ice
Via the Associated Press today (“New home sales drop in Feb. to new low”) — Surprise, surprise (NOT):
Sales of new homes fell unexpectedly to the lowest level on record in February as stormy winter weather kept buyers on the sidelines. The weak results make clear the difficulties facing the housing industry as it tries to recover from the worst slump in decades.
The Commerce Department reported Wednesday that new home sales fell 2.2 percent last month to a seasonally adjusted annual sales pace of 308,000.
It was the fourth consecutive month of declines and the worst showing on records dating to 1963. January’s results, meanwhile, were revised upward slightly to a pace of 315,000.
Economists surveyed by Thomson Reuters had expected February sales would rise to an annual rate of 320,000.
… Some homebuilders say their outlook is getting better, but the recovery is not a strong one.
At InvestmentAdvisor.com today, concerning yesterday’s existing home sales report (“Existing Home Sales Fell Slightly in February; Supply of houses took a big jump over January”):
In a sign that the fragile housing market is still searching for its footing, sales of existing homes fell slightly in February. The National Association of Retailers (NAR) said Tuesday, March 23, that sales of existing homes dropped 0.6% in February from January, to a seasonally adjusted annual rate of 5.02 million.
Buyers did not seem enticed by average national rates on 30-year mortgages that dipped to 4.99%, according to Freddie Mac, nor by the government’s tax credit for purchases of homes.
But widespread storms in February likely dampened sales, according to Lawrence Yun, NAR chief economist. “Some closings were simply postponed by winter storms, but buyers couldn’t get out to look at homes in some areas and that should negatively impact near-term contract activity,” he said in a statement.
Another disturbing bit of news was the large jump in housing inventory at the end of February, which rose 9.5% to 3.59 million existing homes, which represents a supply of 8.6 months, up from a 7.8-month supply in January.
According to Michael Alfstad, president and CEO of the advisory firm Alfstad Capital in Seattle, there was darker news buried in that particular set of numbers.
“The existing inventory increase was a bit misleading because that doesn’t track the shadow inventory, all the homes in foreclosure or owned by financial institutions, and that number continues to grow,” Alfstad said in an interview. “From a market participation standpoint, the housing numbers today have definitely turned a corner – they’re getting worse rather than getting better.”
The weather-related whining brings to mind a TV ad that will forever live in infamy:
Maybe the Obamabots need to consult with Jeff Skilling and other former Enron execs about weatherproofing economic results.
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