We had an abundance of housing reports released this past week that were all positive. From my vantage point the improving market is steady but slow, however you could be mistaken if only reading the headlines from the liberal press.
Pending home sales hit nearly three year high. New Home sales rise almost 16%. Home prices rise 6.8%. Existing home sales edge higher, inventory at 13 year low. All headlines from the press the preceding week.
Yes pending home sales reached a level not seen since the tax credits from the Stimulus were about to expire in April of 2010. Do you remember what followed? Just like cash for clunkers home sales collapsed.
Pending sales are just that, pending. It is one thing to have homes go under contract but another getting the sale closed with the labyrinth of new regulations from Dodd Frank. Nearly 20% of the pending sales in 2012 didn’t close.
New home sales did rise but once again on a seasonally adjusted basis. In other words this is a number subject to manipulation. Non adjusted numbers are usually lower. The only evidence necessary that these adjusted numbers are inflated is this; if things are so good why would Builder Confidence decline?
Home prices rise from the ashes but remain at about 2000 levels. This too is a manipulated number because the inventory being reported at a 13 year low is also manipulated. There are millions of foreclosed homes being withheld from the market to force up prices. Simultaneously Bernanke continues his pact with the devil extending his zero interest rate and quantitative easing policies.
Why would Bernanke extend these programs? Because the economy is not as good as being reported? If these programs were halted would the markets crash? Take your pick.
Existing home sales edge higher. Yes they did by 0.4%. Lawrence Yun, chief economist for the National Association of Realtors adjusted his forecast for existing home sales in 2013 from 5.1 million to 5 million.
Translation; existing home sales continue to run at 80% of healthy, and 65% of the peak. New home sales at a seasonally adjusted 437,000, remain at 62% of healthy and at only 40% of the peak.
As this slow recovery continues there are severe headwinds building that could stop it in its tracks.
Although Consumer Confidence climbed back to 69 it is still a failing grade. What impact might President Obama’s manufactured ‘Mayan Calendar’ Sequestration fear monger campaign have on confidence? Rudy Gulianni has called it a fraud to tell the American people that a 2% cut in the rate of increase in spending would result in the Obama predictions.