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?
AKAnon says:
Admin-Comparing new housing starts to ’72 levels is impressive, but comparing current levels of anything to historic peaks (or valleys) is a little misleading. My takeaway from graph 1 is that new starts (since ’08) remain below ANY level since ’68. Same story, slightly different perspective. Carry on.
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18th July 2012 at 11:29 am
Administrator says:
AKAnon
I also compared starts to the lowest point of the previous six recessions. TBP is always fair and balanced. Just like Fox News.
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18th July 2012 at 11:37 am
Work-In-Progress says:
Will prices continue to decline?
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18th July 2012 at 12:39 pm
llpoh says:
Admin always picks the lowest/highest points when making his arguments (ie gold has increased in value 100 billion percent from its lowest point ever to its highest point ever). Doesn’t make him wrong. It is just literary license. However, pointing that fact out has caused a few shitstorms, I must admit. That is why, of course, I do it!
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18th July 2012 at 7:18 pm
Administrator says:
HOME SALES PLUNGING. BUY STOCKS!!!!
June existing-home sales drop 5.4% to 4.37 million
By Steve Goldstein
WASHINGTON (MarketWatch) — Sales of existing homes in June fell 5.4%, a decline that goes against the grain of more positive indicators from the housing market and one a trade group on Thursday blamed on foreclosure delays and tough mortgage availability. The National Association of Realtors said June sales were at a seasonally-adjusted annual rate of 4.37 million, vs. an upwardly revised 4.62 million in May. Economists polled by MarketWatch had anticipated a 4.65 million annual rate. Year-over-year, sales rose 4.5%, the 12th straight year-on-year gain. The NAR initially reported a 4.55 million rate for May. Inventories fell 3.2% to 2.39 million units. That corresponds to 6.6 months of supply at current sales rate, up from 6.4 months in May. Median prices jumped for a third month, rising 7.9% from year-ago levels to $189,400. This is due to the mix of homes being sold, rather than re-sale price. CoreLogic, for instance, reported that re-sale prices were up 2% year-on-year.
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18th July 2012 at 10:08 am
Administrator says:
What Housing Recovery? Existing Home Sales Miss By Most In 2 Years
Submitted by Tyler Durden on 07/19/2012 10:15 -0400
While it seems like everyone ‘wants’ the housing recovery to be real and organic (and not simply a reflection of limited supply and P.E. investor interest in scraping up the lowest fruit – they have to earn their commish after all), even the NAR couldn’t put lipstick on this morning’s pig of an existing home sales number. The biggest drop MoM in 16 months and the largest miss to expectations in 24 months is hardly the stuff of a solid foundation for the renaissance of the American Dream…
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18th July 2012 at 10:25 am