On Thursday, I noted (at NewsBusters; at BizzyBlog) that the Associated Press’s Marty Crutsinger and Chris Rugaber worked very hard to gloss over October’s horrid housing market news as reflected in the Census Bureau’s reports on housing starts and building permits.
That’s bad enough. But a Tuesday report covering the latest release of the Housing Market Index (HMI) by the National Association of Home Builders demonstrates how utterly determined the wire service is to put gobs of lipstick on a very ugly pig.
For context, I’ll show readers the complete 25-year history of said index (scroll down to the Table 2 link here to download the Excel file):
Given the history, can anyone reasonably claim that an index increase from 15 to 16 justifies anything resembling positive coverage–especially when you realize that September’s original reading of 16 was revised down to 15 in October? It is, if you’re the AP’s Alex Veiga, who also conveniently saved his subject matter expert’s quote for the last paragraph, perhaps so it would end up on the cutting room floor in most subscribers’ relays of the story (bolds are mine):
Homebuilder sentiment index rises in November
U.S. homebuilders battered by the worst summer for home sales in a decade are already looking ahead to spring, saying they feel somewhat more optimistic about the prospect for an uptick in sales.
The National Association of Home Builders said Tuesday its monthly index of builders’ sentiment edged up in November to 16, the highest reading since June.
The index sank to 13 in August and September, the lowest level since March 2009. It rose to a revised reading of 15 last month, but continues to reflect an overall grim industry outlook.
Readings below 50 indicate negative sentiment about the market.
… Many builders are not seeing a dramatic improvement in the number of potential buyers visiting their model homes, but those who do drop by appear to be more serious about buying in the near future, said Bob Jones, the NAHB’s chairman.
“Though the gains have been incremental, the fact that builder confidence has improved over the past two months is encouraging,” he said.
… The index measuring current sales conditions was unchanged this month from October at 16, while the reading for foot traffic from prospective buyers rose one point to 12. But the index for sales expectations over the next six months inched up two points to 25 after improving from September to October by five points.
(final two paragraphs)
The index’s reading for improved sales expectations over the next six months is subjective and should be taken with a grain of salt, said Ticonderoga Securities analyst Paul Przybylski.
“The market is not going to have a significant improvement going into next year,” he said. “It’ll probably be 2012 before we get off the bottom.”
“Grain of salt”? Try a truckload.
The AP’s Veiga “somehow” forgot to tell readers that the NAHB’s “highest since June” reading was really “the same as June.” In historical context, saying something good about October’s result is like getting excited when an 0-12 NFL team finally wins a game — in overtime, because the refs blew a call that cost the other team the game.
What the history chart above shows is that builder sentiment has never really gotten up off the mat since its trough in late 2008 and early 2009. Instead of letting the market recover relatively quickly on its own (see early 1991 by comparison), the Obama administration has extended the pain through government-led attempts at artificial stimulation, with all too predictable poor results. As seen above, once the homebuyers’ credit ended in April (after some extensions into the next several months to allow for deal closures), builder sentiment went straight into the tank again.
Other than to carry out its apparent unspoken mission to prop up the administration’s pathetic economic performance at any cost, including its own credibility, how can the AP possibly justify blowing 570 words on a one-point increase in an economic index that is still near rock bottom, while trying its best make it appear as if it means anything other than the housing industry is still in the deepest of doldrums?
Cross-posted at NewsBusters.org.