The Frighteningly Obvious Truth That Most Deny – US Housing Continues Freefall & Is Nowhere Near The Bottom
by Reggie Middleton
The residential real estate situation is still looking quite bleak. The downturn (actually, the continuation of the earlier downturn – they were not two separate events) that I forecast last year has come, and come with a vengeance. If we may reminisce, the mainstream media was overrun with optimistic housing forecasts, primarily as a result of some minor metric upticks born from incessant .gov bubble blowing. From my post of June 22nd last year – As I Made Very Clear In March, US Housing Has a Way to Fall
From Bloomberg, early in the morning you get the usual, inaccurate analyst chatter: Sales of Existing Homes in U.S. Probably Climbed on Tax Credit
Sales of U.S. previously owned homes rose in May to the highest level in six months as buyers rushed to beat a June tax-credit deadline, economists said before a report today.
Purchases of existing houses, which are tabulated when a contract closes, increased 6 percent to a 6.12 million annual rate, according to the median of 73 forecasts in a Bloomberg News survey. To receive a government incentive worth as much as $8,000, buyers must have signed contracts by the end of April and need to complete deals by the end of this month.
Credit-induced gyrations will make the underlying health of the market difficult to determine over the next couple of months. A slump in builder shares since early May signals investors are concerned the damage caused by the end of government stimulus, mounting foreclosures and unemployment will exceed the benefits of lower mortgage rates.
Then the actual report comes out: Existing Home Sales in U.S. Unexpectedly Fell to 5.66 Million Rate in May