May 23, 2012

April New Home Sales: As Usual, Unimpressive

Two years ago in April, the Obama administration-driven special first-time homebuyers’s credit expired. That impending expiration drove new-home sales to a seasonally adjusted annual rate of 420,000 (actual sales that month were 41,000).

The highest such number seen during the next 18 months was 311,000. In recent months, the number got as high as 353,000 in February and dropped back to 328,000 in March (these numbers were updates to 358,000 and 332,000, respectively, in today’s release).

The Census Bureau released April’s new home sales numbers this morning (along with revisions to March).

The raw data shows that 33,000 homes were sold nationwide. While that’s the highest raw number in an individual month since April 2010, it’s still almost 20% below the two-years-ago figure. If that comparison seems unfair because of the homebuyer’s credit, remember that it was sold as a way to create some kind of sustainable momentum in the housing market. It obviously did no such thing.

After seasonal adjustment, annualized sales were up 3.3% over March. March itself was revised slightly upward, but it’s drop from February was still over 7%. If we’re to believe in the accuracy of seasonally adjusted numbers — which I don’t in this case, because the economy hasn’t been normal enough to have any reliable data based on real seasonal fluctuations since what I have been calling the POR (Pelosi-Obama-Reid) Economy began almost four years ago — April got back less than half of March’s decline.

There is no compelling evidence that the housing market and “home construction” as properly defined is doing anything but scraping along at or not far above the all-time bottoms of the past three years. Yet in his dispatch today about the Census Bureau’s report, the Associated Press’s Martin Crutsinger wants readers to believe that it constitutes “the latest evidence that the U.S. housing market could be starting to recover.”

As I said about Chris Rugaber’s report last week which claimed that “Home construction is near a three-year high”: “I would call that assertion ‘horse manure,’ but that would be unfair to equine excrement.” One of these days, probably not in my lifetime, AP reporters will concentrate on reporting the facts, get opinions from qualified analysts, and otherwise just … shut … up. We shouldn’t have to filter through what you think at the expense of omitted facts, Chris and Marty, and you have no right to impose your opinions — positive or negative — on us.

Meanwhile, the number of homes actually for sale in the whole country is … (can you believe it?) 144,000. That’s the second-lowest reading on record. The lowest-ever figure of 143,000 came in March.

The good news is that the number of months of sales in inventory is an historically acceptable 5.1 months, down from about 12 months during the worst of the housing mess. The bad news is that, thanks primarily to the Obama administration’s ceaseless meddling in the housing, home-lending, and banking industries, the industry had to shrink by at least 60& from non-bubbly normal levels to stabilize. As long as the government’s interventionist mindset continues to rule the roost, the prospects of a meaningful comeback are slim.

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UPDATE: The 13 lowest monthly readings ever in number of homes for sales occurred … in the last 13 months.

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1 Comment

  1. I think another way of looking at the housing market is to look at the number of Realitors that are currently working. Look at the number in 2006 and take a look at the number in your state now. I’m from NJ and in 2006 I could trip over a Realitor wherever I went. Now, the few that remain left are despirate for work.

    Comment by Tired American — May 25, 2012 @ 10:40 pm

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