New home sales fall over 2% in February, hits record low
posted at 11:34 am on March 24, 2010 by Ed Morrissey
We’re finally seeing some progress on the economy … at least in the media reporting, anyway. For the second straight day, a wire service has managed to eschew the word “unexpectedly” when reporting bad news, this time on new home sales in February. Mirroring yesterday’s report on existing home sales, the new-home market dropped for the fourth straight month (via Guy Benson):
Sales of newly built U.S. single-family homes fell for a fourth straight month to a record low in February, a government report showed on Wednesday, heightening fears of renewed weakness in the housing market.
The Commerce Department said sales fell 2.2 percent to a 308,000 unit annual rate from an upwardly revised 315,000 units in January.
That’s not to say that Reuters doesn’t imply the “unexpected” term in its report:
Analysts polled by Reuters had expected new home sales to edge up to a 320,000 unit annual pace from January’s previously reported 309,000 units.
Those same analysts have been wrong every single month in this stretch. Perhaps Reuters should employ better analysts. How many months in a row of getting it wrong will it take for Reuters to find people who guess correctly?
The news wasn’t all bad. Prices rose from January 6.1%, the highest increase in several months. Unfortunately, that is hardly enough to recuperate the losses in home values over the last couple of years. Even that news is tempered by the increase in new-home inventory, up 1.3% while sales fell 2.2%. The inventory backlog will now take over 9 months to unload at the current sales rate, which means that stressed investors will probably have to cut prices to get income flowing again.
Reuters also noticed, as wire services did yesterday, that the extensions of the tax credit hasn’t had any impact on housing sales. I warned last year that the temporary tax credits had little impact but to steal sales from the next several quarters, since the credit on its own didn’t create a large class of suddenly-qualified buyers. It simply incentivized those who would have bought in the nearer term to speed up their purchases, much as the Cash for Clunkers program did for car buyers. The effect of these policies were easily predicted by everyone outside of the circle of analysts employed by Reuters, or by the White House.
Update: Bloomberg still likes the term “unexpectedly.”
Blowback
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Unexpectedly missing.
Apologetic California on March 24, 2010 at 11:36 AM
The only accuracy that the Ministry of Truth is interested in is the accuracy to the party line.
–ted c
ted c on March 24, 2010 at 11:36 AM
Expectedly unexpected.
singlemalt_18 on March 24, 2010 at 11:36 AM
Obama’s legacy. Ushering in American decline.
daesleeper on March 24, 2010 at 11:37 AM
Who are these idiots buying new homes? Government employees, that’s who.
keep the change on March 24, 2010 at 11:37 AM
I’m in the mortgage business and these numbers are indeed bleak. My own home value briefly went up last year but is now dropping again, and I live in a pretty decent market. Mortgage rates are inching back up again as well, which is inevitable given that the U.S. government is about to lose its AAA bond rating.
rockmom on March 24, 2010 at 11:37 AM
We need a new government program….Cash for Trailers
PatriotRider on March 24, 2010 at 11:38 AM
The analysts are Keynesian buffoons.
spmat on March 24, 2010 at 11:38 AM
Luckily the Health Care Reform Bill will bail us out of this problem…in fact all of our worries are over…
The cackle of Pelosi, the idiot smiling face of Biden, the arrogance of Obama…puts me in a foul mood.
Not too mention the turncoat, weasel, Stupidak…and now more of this, but hey…unemployment is only about 10%, everything is F’in rosy….
right2bright on March 24, 2010 at 11:40 AM
I’ve been researching this a bit… as I’m about to have to sell my house.
Its really a regional market right now… some areas are still doing OK, some areas are VERY hard hit.
Romeo13 on March 24, 2010 at 11:41 AM
But, but, but…..BOOOOSH!
/Dem mode
VelvetElvis on March 24, 2010 at 11:41 AM
My wife and I bought a new house a year ago. But we live in Katy, TX where the cost of living is very reasonable(property taxes notwithstanding).
Doughboy on March 24, 2010 at 11:41 AM
This Graph of the Day PERFECTLY captures the shifting of demand caused by Cash for Clunkers.
WashJeff on March 24, 2010 at 11:41 AM
People behaving rationally in a market with artificial, non-market-related incentives (new home “tax credits”, artificially low mortgage rates, forced lending).
spmat on March 24, 2010 at 11:41 AM
Skip the middleman.
Cash for everyone.
Crank up those printing presses, prosperity is just around the corner.
MarkTheGreat on March 24, 2010 at 11:41 AM
The progressive answer would be to depopulate the nation by … oh, I dunno, 45%? That would leave a glut of homes, making them cheaper and more available to the public.
Or, after depopulation the government could simply take control of all homes and hand them out to whichever victim group was in favor at the time.
Progressives have an answer for everything. They’re really smart and care a lot … a whole lot.
darwin on March 24, 2010 at 11:42 AM
Nothing that a government takeover of housing wouldn’t fix, after all, it’s a right.
Here is your new home comrade, and it comes with 20 other people who will share it with you.
Bishop on March 24, 2010 at 11:42 AM
Home sales number even worse than headline report
The inventory of existing homes would be substantially higher if banks were to release their foreclosed home inventory (REO – real estate owned) onto the market. Furthermore, as per the self-imposed foreclosure moratorium by big banks during December and January, expect that the foreclosure rates will begin to spike – we’re already seeing this to some extent in the numbers. As banks let foreclosed homes pile up, expect the market will “feel” this “shadow” inventory and buyers will likely wait. Also expect that most “frothing-at-the-mouth” buyers who jumped to take advantage of the massive taxpayer tax credit subsidy, which theoretically expires April 30, have already likely made their purchase. Too bad for them because I expect prices to drop another 5-10% this year alone from where we are now.
MB4 on March 24, 2010 at 11:45 AM
Did “Cash for Codgers” make it into the sign ObamaCare bill?
WashJeff on March 24, 2010 at 11:45 AM
Once again, I am shocked….unexpectedly shocked, of course
evie on March 24, 2010 at 11:48 AM
The article in Bloomberg didn’t eschew the word
http://www.bloomberg.com/apps/news?pid=20601087&sid=a8xSP8Wb3iW8
scalleywag on March 24, 2010 at 11:49 AM
BOOOOOOOSH
search4truth on March 24, 2010 at 11:49 AM
AP Radio News at the top of this hour, on XM America Right used ‘unexpectedly’ in describing this….
So, the meme continues.
LegendHasIt on March 24, 2010 at 11:49 AM
“unexpectedly” precipitous
Speakup on March 24, 2010 at 11:49 AM
Obamacare will fix all this. Soon it’ll be nothing but blue skies and soaring home sales, from the mountains to the prairies to the oceans bright with foam.
J.E. Dyer on March 24, 2010 at 11:50 AM
I can’t wait for the reports that the Dems “unexpectedly” lost Congress in 2010 and the White House in 2012.
Doughboy on March 24, 2010 at 11:50 AM
Imagine if the Media was inclined to criticize Democrats as vigorously as they do Republicans.
They have to live with the disaster that Democrat policies are as well as the rest of us. Put some pressure on these people for once, and hold them accountable for their idiotic policies that are drowning us in debt and strangling the economy while it’s extremely fragile already.
Mord on March 24, 2010 at 11:50 AM
Was this unexpected?
orlandocajun on March 24, 2010 at 11:52 AM
It’s Christmas!
ladyingray on March 24, 2010 at 11:53 AM
Hey, let’s expand that thar tax credit thingy again so the housing market will start booming… it’s been working so well, doncha know?
yoda on March 24, 2010 at 11:54 AM
What is galling and infuriating is that none of this needed to happen. This is a huge government failure. Interference by the government in any part of our lives will cause these problems. They have interfered and we are hopelessly failing. The intereference is bad enough, but adding the corruption of the Democrats and their failure to address it has us gasping for air. The government is a bottomless pit of corruption.
BetseyRoss on March 24, 2010 at 11:54 AM
Once again you folks are not looking at things right. This reduction in home building means less trees cut down thereby saving the planet. Also, with less mortgage applications there is less paper used, again saving the planet.
Sheesh, get a clue.
GnuBreed on March 24, 2010 at 11:58 AM
My house value dropped substantially this year (20% range) funny though, my property taxes went up.
I for one welcome our new insect overlords.
WitchDoctor on March 24, 2010 at 11:58 AM
Ed, have you ever heard of analyst consensus? If the consensus expects a rise, then a drop is unexpected. If the consensus expects a drop, then a rise is unexpected.
Making fun of the word unexpectedly is really, really stupid.
blink on March 24, 2010 at 11:58 AM
It’s global warming/snow/Bush/Fox News/racist teabaggers fault
aop on March 24, 2010 at 12:01 PM
Oh my! I’m at a loss for words, this is, oh what’s the word? Oh, UNEXPECTED!
I demand that the MOST POWERFUL WOMAN in the World immediately open a Joint House and Senate investigation into HOW BusHitler and Darth Cheney are controlling the crashing housing market. Don’t they know they are ruining my ability to endlessly flip houses with NO money down….how can I bank my 1st $Million$ if I can’t rake in the big bucks from a good old housing bubble?
saltyrover on March 24, 2010 at 12:02 PM
Except when the consensus is almost always wrong every month.
WashJeff on March 24, 2010 at 12:03 PM
I don’t think they show the increase accurately. I am in the market for a used pickup in the $10K or less catagory. Before C4C, I could have been able to take my pick and haggeled on the price, but I didn’t need one then. There are absolutely none around now, that are in halfway decent shape. The prices in New england have skyrocketed on used pickups that are less than ten years old.
Johnnyreb on March 24, 2010 at 12:04 PM
I’m waiting for the headline: ECONOMY IMPROVES UNEXPECTEDLY!
I figure this will occur about one week after the November elections for some reason. Just after the announcement of the large number of Democrats who got kicked out of office.
GarandFan on March 24, 2010 at 12:07 PM
It’s like the old saying goes: Fool me once, shame on you;
Fool me twice, shame on me;
But fool me every freaking month for a year-and-a-half straight????
And, Damn! Just… Da-am!
logis on March 24, 2010 at 12:08 PM
Everyday, even before my feet hit the floor, I thank God that we elected Obama President over that old experienced guy.
Seriously, I am so depressed at the direction of our nation, I don’t even know what to do about it anymore. My radical socialist Congressmen ignores constituents. Senators Webb and Warner, likewise, have no concern about what voters think. Contributing to the right causes seems futile since any real effort can get trumped by a corrupt congress filled with sell-outs like Bart Stupak.
What’s an American to do other than look for job opportunities in Australia?
highhopes on March 24, 2010 at 12:09 PM
“Unexpected” is the New Black…
Haiku Guy on March 24, 2010 at 12:11 PM
More like the first of October so all the Dems can run on the claim that Obama’s recession finally turned a corner and America needs to stay the course and keep the Dems in power. This claim will work with many of the fools who elected the filthy lying dictator in the first place. Then two weeks after all these bastards get reelected, the unexpected drop in the economy undoes all the “good news” from October.
highhopes on March 24, 2010 at 12:11 PM
Good point.
Statistically, if they would just guess, they would have got it right at least a few times over the past 18 months…
catmman on March 24, 2010 at 12:15 PM
Racist.
LibTired on March 24, 2010 at 12:16 PM
Here in Chesterfield County, Virginia, the housing market stinks. I live in a starter home community (all the house I need); on my cul-de-sac alone, there are 3 houses empty. On the main drag, maybe 6-10 for sale and 5 for rent on that one street. Strip malls almost empty, and my brother, who is a civil engineer in construction, says that new construction is dead (he had 2 billable hours last week). I’d e-mail my Senators, but with Warner and Webb, I figure why bother.
Sarah2053 on March 24, 2010 at 12:19 PM
10% unemployment is the new 3.5% per cent unemployment….at least till a Republican wins the WH again.
rickyricardo on March 24, 2010 at 12:20 PM
Why is a 6.1% increase in the price of homes a good thing?
Would you be happy if gas went up 6.1%? How about food? Or clothes? Or electronics?
Yet for some reason, when housing – the biggest expense for most people – prices rise people get excited.
Makes no sense people.
angryed on March 24, 2010 at 12:21 PM
Hmmm . . . they left out “unexpectedly.”
PJ Emeritus on March 24, 2010 at 12:23 PM
Let’s see…20 million empty homes.
20 million illegal aliens.
Of course!! Legalize the aliens, give them all $100K to buy a house.
Problem solved.
angryed on March 24, 2010 at 12:26 PM
Ed, the AP said “unexpectedly”. So we’re still good……
Robert17 on March 24, 2010 at 12:27 PM
Median price for a house is around $175k. Taxpayers will have to pony the whole shabang, probably gift them with some taxpayer bucks for a 7-11 or restaurant too.
Robert17 on March 24, 2010 at 12:30 PM
Actually, as far as housing goes, the blame goes at least as much to Jimmuh Cahtuh & Bubba Clinton.
jgapinoy on March 24, 2010 at 12:32 PM
It’;s F’in
Christmasxmas…right2bright on March 24, 2010 at 12:35 PM
So when does “Cash for kitchen junk” start? Did I miss it?
I have a good used dishwasher that I would like to offload. Sure it is still usable and has market value but I want to give it to the Government for target practice.
Electrongod on March 24, 2010 at 12:40 PM
The graph only reflects new vehicles and is based on real sales data. The graph totally shows the demand shift that occured. The grpah would be smooth if not for the rapid up-down of C4C.
Used cars…what you are experiencing totally fits in with what conservatives predicted.
WashJeff on March 24, 2010 at 12:57 PM
Heh.
The weird part of all of this is still the Dow going up after this news and the passage of Socialism. WTF?
Any market analysts out there who think they know why?
Jaibones on March 24, 2010 at 1:06 PM
If you want to be intellectually honest, plenty of blame also goes to W. Remember the Ownership Society….as in everyone with a pulse should own a house? Carter started the mess, Clinton expanded it and W. put the final touches on it before it all fell apart.
I’d still like to know why this is a bad thing. Why is it good when a house that cost $100K in 2000 cost $300K in 2005? And why is it bad when the same house now costs $200K instead of $300K? Or does everyone like paying more money for their housing?
angryed on March 24, 2010 at 1:08 PM
Got a bit of an insider’s perspective on that one. The insurance companies have visions of dollar signs dancing in their heads, when people are FORCED to buy their products. They’ll sell junk policies and actually make out like bandits.
…but they don’t or won’t see the endgame where the government they bought turns on them and monopolizes the industry.
Although I do wonder how many of the great high pooh-bahs do recognize what’s coming farther down the line, and have ways to profit immensely from the mandate and then escape before the curtain falls. Make no mistake – there WILL be people who profit from this mess.
Dark-Star on March 24, 2010 at 1:16 PM
I honestly had not heard that. I had only heard about Jimmuh’s & Bubba’s involvement in the scheme.
Mine went from $280K to $175K. AZ was particularly hard hit.
jgapinoy on March 24, 2010 at 1:20 PM
angryed on March 24, 2010 at 1:08 PM
Most of us already own a house, so we feel better when that investment improves in price. It’s not like we have to buy another house each month.
MarkTheGreat on March 24, 2010 at 1:20 PM
I must say that I am unexpectedly flabergasted… if you could see my mouth drop in utter shock it would make you run screaming for the hills.
kringeesmom on March 24, 2010 at 1:24 PM
But the AP didn’t. During the Laura Ingraham radio time this morning AP said “…housing dropped unexpectedly by 2+%…”
Drop dead media operatives, choked by your lies.
Schadenfreude on March 24, 2010 at 1:33 PM
They also believe that the blizzards affected those sales, too:
Patriot Vet on March 24, 2010 at 1:37 PM
While they indeed believe that they don’t own the guns. If a depopulation occurs far more progressives will suddenly find themselves contributing to the last step of the food chain, the decomposers.
chemman on March 24, 2010 at 1:42 PM
The attitude of why you owned a house has changed in the last 30 years. It went from being a home to being an investment where people thought they should get good appreciation on the initial cost. The house became an alternate to the Stock Market.
chemman on March 24, 2010 at 1:49 PM
No, but the poverty stricken are being sorely discriminated agaist re housing. Since Fannie and Freddie now own most of the houses and they can’t unload them, I think we need a different program. Let poor folk just live in these houses.
We can call it, “Digs for Deadbeats.”
Chewy the Lab on March 24, 2010 at 1:49 PM
If they keep making noises about nationalizing 401k’s, I’m going to be closing mine out, and use it to pay off the mortgage.
MarkTheGreat on March 24, 2010 at 1:59 PM
Traders who are betting short-term on insurance companies raising premiums 300% over the 4 years before they’re capped. They’ll try to get out before the bureaucracy kicks in, and leave someone else holding the crap.
dominigan on March 24, 2010 at 2:06 PM
+10
dominigan on March 24, 2010 at 2:08 PM
Some us sold to you at the peak and have been watching prices plummet. Don’t blame me for making a bad investment.
My point is in the aggregate having people slave away for a house they can barely afford is not a good thing. Having affordable houses that people can live in without spending 40 or 50% of their income on, is a very good thing.
Gas goes to $4 a gallon you think it’s the end of the world. But a 3 bedroom houses is priced at $750K and it’s party time. It makes no sense.
angryed on March 24, 2010 at 2:10 PM
Funny how bad weather is always blamed for bad economic news, but good weather is never credited for good news.
You never see a headline that says “SUNNY AND 70 DEGREES LEADS TO UNEXPECTED HIRING BOOM IN JUNE”
angryed on March 24, 2010 at 2:14 PM
And the worst part? We’re not learning from either.
Remember the article about SUV sales reviving the minute cheap gas came back?
Dark-Star on March 24, 2010 at 2:14 PM
I’m hearing that the treasuries auctions are not going well. There is a big drop off in demand. With inflation looming, as well as a potential lose of the US’s Aaa rating, I’m guessing that there are a lot of people who think the stock market is a safer place to put their money compared to bonds.
MarkTheGreat on March 24, 2010 at 4:33 PM
It may not be “unexpected,” but it is “unprecedented”
J_Crater on March 24, 2010 at 5:49 PM
YES!
Because economies are cyclical and this economy is cycling back. For now, the bull run is stronger than the fears about this socialist law.
While I think this law will retard future growth that could have occurred. I still think the economy will continue to rebound.
blink on March 25, 2010 at 12:12 AM
The economy is rebounding???? Where?
MarkTheGreat on March 25, 2010 at 8:35 AM