The Bush Housing Bust
- From: Too_Many_Tools <too_many_tools@xxxxxxxxx>
- Date: Thu, 24 Apr 2008 22:58:53 -0700 (PDT)
Listen....you can hear your most valuable asset...your
house...becoming less...and less...and less under George Bush.
It would seem everything the man touches gets smaller...and
smaller...and smaller....
In hopes of helping him and the Country, please forward all your penis
enlargement spam to the White House.
Laura will thank you for it.
TMT
New home sales plunge to lowest level in 16 1/2 years By MARTIN
CRUTSINGER, AP Economics Writer
Thu Apr 24
Sales of new homes plunged in March to the slowest pace in 16 1/2
years as a two-year housing downturn extended into the start of
another spring sales season. The median price of a new home in March
compared to a year ago fell at the fastest clip in 38 years.
Sales of new homes dropped by 8.5 percent last month to a seasonally
adjusted annual rate of 526,000 units, the slowest sales pace since
October 1991, the Commerce Department reported Thursday.
The median price of a home sold in March dropped by 13.3 percent
compared with March 2007, the biggest year-over-year price decline
since a 14.6 percent plunge in July 1970.
Housing, which boomed for five years, has been in a prolonged slump
for the past two years with sales and home prices falling at
especially sharp rates in formerly hot sales areas.
Some analysts said they believe the slide in sales may be close to
ending although they said any rebound is likely to be slow and anemic
with prices continuing to fall, possibly until this time next year.
Earlier this week, the National Association of Realtors reported that
sales of existing homes also fell in March, dropping by 2 percent,
with prices declining on a year-over-year basis by 7.7 percent.
"The start of the spring home buying season is turning out to be a
bust," said Stuart Hoffman, chief economist at PNC Bank Corp. in
Pittsburgh. "It is much better to be a buyer than a seller right now."
Hoffman said he thought sales would stabilize by this fall but that
prices could keep falling until the start of the 2009 spring sales
season. Prices are being depressed by the continued huge inventory of
unsold homes, a backlog that reflects rising numbers of mortgage
defaults which are dumping more homes on an already glutted market.
On Wall Street, stocks rallied Thursday as investors were cheered by
first-quarter results from Fort Motor Co. and a sizable decline in
weekly applications for unemployment benefits. The Dow Jones
industrial average rose 85.73 points to close at 12,848.95.
For March, new home sales were down in all regions of the country,
dropping the most in the Northeast, a decline of 19.4 percent. Sales
fell by 12.9 percent in the West, 12.5 percent in the Midwest and 4.6
percent in the South.
The overall drop was much bigger than expected and the size of the
declines in many regions of the country also took economists by
surprise.
"Every region shared in the carnage," said Joel Naroff, chief
economist at Naroff Economic Advisors. "These are not soft numbers.
They are Depression numbers."
Still, economists said they believed that the extent of the downturn
may be signaling that at least in terms of sales, things could bottom
out by this summer or by the latest, this fall, as falling prices lure
buyers back into the market.
"Sellers continue to aggressively price and market new homes," said
Patrick Newport, an economist with Global Insight. "Provided that
financial markets stabilize, we still expect their efforts to pay off
with new home sales turning in the second half of this year."
Economic growth slowed to a near-standstill at the end of last year as
the economy was battered by the prolonged slump in housing and a
severe credit crunch that has resulted in billions of dollars of
losses at many of the nation's largest financial institutions. Many
economists believe the country has fallen into a full-blown recession
although President Bush earlier this week disagreed, saying the
country was in a slowdown but not a recession.
Consumer sentiment has plunged to recessionary lows as Americans have
watched gasoline soar to an average price above $3.50 per gallon
nationally.
In other economic news, orders to factories for big-ticket
manufactured goods fell for a third straight month in March, the
longest string of declines since the 2001 recession, while
applications for unemployment benefits fell by 33,000 to 342,000.
The Commerce Department said demand for durable goods dropped by 0.3
percent last month, a worse-than-expected performance that underscored
the problems manufacturers are facing from a severe economic slowdown.
The last time orders fell for three consecutive months was from
February to April of 2001, when the country was sliding into the last
recession.
The weakness in manufacturing orders was led by a 4.6 percent drop in
orders for autos, a sector hard hit by soaring gasoline prices, and
the weakening economy, which have cut sharply into car sales. Orders
in the category that includes home appliances fell by 6.6 percent.
This industry has been hurt by the two-year slump in home sales.
The Labor Department reported that claims for unemployment benefits
fell by 33,000 last week to 342,000. Economists had been expecting
claims to rise by 3,000, but even with the improvement analysts said
the weak economy is still putting greater pressures on the labor
market and unemployment, now at 5.1 percent, is likely to rise
further.
.
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