Housing: Have we hit bottom?
An unexpected jump in new-home sales has the markets optimistic. Is the hope warranted?
“Great news for the economy,” said Stephanie Armour in USA Today. New-home sales “surged” 9.6 percent in July compared with a month earlier, to a seasonally adjusted annual rate of 433,000—the highest pace since last September. Taken together with the reduction of new houses on the market and rising home prices in 18 of 20 markets, as noted in this week’s S&P/Case-Shiller Index, the jump in sales “bolstered signs of an improving housing market.”
Let’s look at those numbers a different way, said Bernard Condon in Forbes: “New-home sales for July clocked in at their lowest level for that month since 1982.” Also, sales are 9 percent lower than last July, and down “a frightening 32 percent” since January, compared with the same period last year. Yes, July marked the fourth straight monthly increase, and “housing may indeed have bottomed. But let’s not get carried away.”
Put it this way: “Things are better but not good,” said Michael Yoshikami in CNBC. There’s a “massive backlog” of homes not yet on the market, because “someone is losing money” on many of these sales, and banks are unwilling to sell at a loss. Also, “trade-up” buyers aren’t in the market, because they can’t sell their current homes. “Housing will recover,” but recovery will be slow and the new market won’t look like the old one.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Create an account with the same email registered to your subscription to unlock access.
-
Today's political cartoons - April 27, 2024
Cartoons Saturday's cartoons - natural gas, fundraising with Ted Cruz, and more
By The Week US Published
-
Aid to Ukraine: too little, too late?
Talking Point House of Representatives finally 'met the moment' but some say it came too late
By The Week UK Published
-
5 generously funny cartoons on the $60 billion foreign aid package
Cartoons Artists take on Republican opposition, aid to Ukraine, and more
By The Week US Published