At the Associated Press today, economics writer Christopher Rugaber was a bit subdued, even when presented with nominally favorable news. He wrote that the March rise in the National Association of Realtors’ pending home sales index of 3.4 percent, the first gain in nine months, was “a sign that the housing market might pick up after a sluggish start to the year.”
Rugaber’s relative ruefulness, which after being fed through the media translator actually means “Things really stink,” is understandable once one looks at how pathetic that gain is in the circumstances, and at a key paragraph in the NAR’s press release which he chose to ignore.
The economic mantra since December has been that the economy was staggered by horrid winter weather, and that it would come roaring back once the snow, ice, and cold temperatures went away for good. Too bad the NAR’s index doesn’t reflect that (graph is part of the group’s video found here):
Given the wintry circumstances in much of the nation in December, January and February, and even though the 3.4 increase beat expectations, a bounceback heralding a return to market growth, or even a mild “pickup,” should have been much greater.
This underperformance is more vividly shown in a graph carried at Zero Hedge:
In the wintry circumstances, March’s year-over year decline of 7.9 percent isn’t much of an improvement over the roughly -10 percent readings in January and February.
As to the future, here’s the key paragraph from NAR which Rugaber chose not to report:
Although home sales are expected to trend up over the course of the year and into 2015, this year began on a weak note and total sales are unlikely to match the 2013 level.
Though he didn’t report it, it’s not fair to say that Rugaber totally ignored it. It certainly tempered his enthusiasm.
Amazingly, though, the AP reporter was able to find someone to play Pollyanna:
“The March increase … comes as a relief,” said Jennifer Lee, an economist at BMO Capital Markets. “The weather-related housing pickup is still on track.”
Really, Jennifer? Although I’ll concede that there should be a bit of a bleedthrough into April, the pickup is really just about over.
Cross-posted at NewsBusters.org.