The MSM has blaring headlines about the 25% leap in new home sales. Meanwhile, prices are flat with last year and 30 year mortgage rates hit 4.51% today, up from 3.25% early in 2013. The housing recovery is peetering out, but don’t tell the MSM or Wall Street. It’s amazing what you can do with small numbers when it comes to percentage increases. Here is a link to the data:
Whenever I want some perspective on this fantastic housing recovery, I go to this chart. Calling the data reported today a housing recovery is a pathetic joke. Look at that chart. Who, other than a CNBC bubble headed bimbo or Jim Cramer, would call this a housing recovery? New home sales are lower than they were in the late 1960′s for Christsake. New home sales are 70% below the level of 2005. They are 50% below the level during the 2001 recession. They are at the same levels of the 1991 and 1981 recessions. And this is with mortgage rates at near record lows.
When you actually analyze the data from the Census Bureau, you realize what a joke these press releases really are. There were 35,000 freaking new homes sold in October in the whole country of 100 million households. They then extrapolate and seasonally adjust it to get to their 444,000 number.
The biggest joke is that only 11,000 of those 35,000 homes are actually completed. And 12,000 haven’t even been started. When prices are falling and interest rates are rising, people tend to cancel their contracts for buying new homes. When I was at Toll Brothers, the cancellation rate reached 36% as the market started to plunge.
Today’s propaganda report from the MSM is nothing but a candle in the wind. Meaningless. Now back to your regularly scheduled buy stocks programming.