The MSM is touting the “STRONG” housing starts this morning. The headlines blare that housing starts are back to 2008 levels. It truly is a recovery this time. What they don’t talk about is that housing starts are being driven by multi-family starts. It seems rental units are being built because there are few people left in the country that can afford a single family house. Single family housing starts are below early 2010 levels. They are 70% below 2006 levels. And this is with the lowest mortgage rates in the history of the country. Recovery??? Really???
How about a little perspective? Housing starts are 70% below the levels of 1972, forty years ago. The population of the US was 210 million. Today, the population is 315 million. So we’ve got a 50% increase in population and a 70% decline in housing starts. Does that sound like a housing recovery? Housing starts today are 10% to 30% below the lowest levels of the last 6 recessions in the U.S. Does that sound like a housing recovery?
And of course we have the old shadow inventory. The National Association of Realtors and the National Association of Homebuilders are riddled with liars, knaves and fools. They pump out misleading and false data on a daily basis. The truth is that the Wall Street banks are purposely dribbling foreclosure properties into the market to avoid the price drops required to clear the inventory. It’s the extend and pretend game that is being utilized by those in control. The shadow inventory is on the rise again. And think about all the people in the country who would love to sell their home but they are too far underwater to even consider selling. That would add another 10 million homes to the shadow inventory.
Bloomberg throws some cold water on the housing recovery storyline:
The shadow inventory of homes – those in foreclosure plus those 90 days late on mortgage payments – is on the rise again, a further indication that the supply side has not yet healed. Accoring to RealtyTrac, foreclosure starts jumped 6 percent on a year ago basis in the second quarter, the first year-over-year increase since 2009. There are roughly 4.16 million homes that could begin to flow to market. Once one takes the number of homeowners 30- to 90-days late on their mortgage payments and includes the likely default of those that have negative equity on their homes, there is a strong possibility more than 6.5 million additional foreclosures will enter the pipeline. The addition of homes that banks may be holding back suggests a much larger number. Laurie Goodman of Amherst Securities Group has testified before Congress that it could be as high as between 8 and 10 million.
So you gots to ask yourself – do I believe the MSM, NAR, and NAH? Or do I believe my eyes and the facts?