Attempting to make sense out of this week’s housing reports is like trying to understand a woman. People asking, "how is the market" is like someone asking "does this make my butt look big?"
Last week I reported that retail sales falling in January were blamed on the weather when online sales led the way. Then building permits dropped the most in seven months blamed on the weather when it was the West with permits down 26% that led the way.
Now try to understand this; new home sales surged in January, up the most in five years by 9.6%, but led by the Northeast which was up by 73% MoM. Buehler? Weather?
The median sale price did decline 3.4% to the lowest price for new construction since August. At least that reassures us the principle that price sells remains true. Same as when she saved you money because it was on sale.
While everyone is blaming the weather for the anemic economy, there is much more to be considered. The underlying fundamentals for a strong housing market simply aren’t there. A steady market is probably the best we can expect.
Obamanomics makes it impossible for a recovery. The CBO documented for us the continued attack on jobs by Obamacare to cost up to 2.5 million jobs, and the populist campaign to raise the minimum wage killing another 500,000 to 1,000,000 jobs.
The lowest percentage of people working since 1978 levels can’t possibly expect relief from an administration who makes ideological decisions in lieu of sound economic decisions, and neither can housing.
This makes job growth, the size necessary to advance a recovery impossible. From the American Spectator:
Since the Great Depression of the 1930s, “there have been 10 other recessions before this last one,” reports Investor’s Business Daily. “On average, all the jobs lost in those recessions were recovered within two years after the recession started.” [end quote]
Since there are fewer jobs than when Obama took office in 2009, can we safely say what he is doing isn’t working after five plus years?
Housing fundamentals are downright scary. Purchase mortgage applications have crashed to the lowest since 1995 (that’s 19 years!). This can’t be due solely to the weather.
Most distressing is the markets most important buyer is disappearing, first time home buyers. Typically they make up 40% of the market that start home sales rolling upstream, but are now down to 26%.
The Obama agenda has eviscerated an entire generation of youth, second in damage only to the middle class, with command and control authoritarian federal government oppressing the private sector depressing growth.