The latest housing news is not pretty. The decline, however, was only slightly below the expected annualized level of 4.94 million units. From Bloomberg:
Sales of previously owned U.S. homes fell in June to the lowest level in a decade, signaling tumbling real-estate prices and consumer confidence are hurting demand.
Resales dropped 2.6 percent to a lower than forecast 4.86 million annual rate from a 4.99 million pace the prior month, the National Association of Realtors said today in Washington. The median home price dropped 6.1 percent from June last year…
“People are waiting until prices hit bottom, and credit is still difficult to obtain,” Gus Faucher, director of macroeconomics at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “We expect to see home sales fall further.”
In its report on the news release, the Wall Street Journal included these cheery tidbits:
Existing-home sales resumed falling in June and the median price also dropped as inventories crept higher.
Separately, The number of U.S. workers filing new claims for unemployment benefits soared last week, matching a three-year high, suggesting no stabilization in sight for labor markets.
Home resales slid to a 4.86 million annual rate, a 2.6% decrease from May’s unrevised 4.99 million annual pace, the National Association of Realtors said Thursday. The median home price was $215,100 in June, down 6.1% from $229,000 in June 2007. The median price in May this year was $207,900.
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“People are waiting until prices hit bottom, and credit is still difficult to obtain” implies sales will return to previous levels. What if previous levels (2004-2005-2006) were in fact abnormally high ? Why will sales levels not simply settle at 1998 levels ?
I think the phrases “more than expected” and “less than expected” have become such boring cliches they should be banned from public discourse until the end of this crisis, or the end of the US as we know it, which ever comes first.
A host of banks have noted in the past week that house prices are expected to decline through 2010. Pimco Bill gross is subtly hinting that in a Bloomberg article that a “very smart” investor friend of his is whispering that the Gov’t could buy up $1 Trillion of houses and fix the problem of falling house prices. This guy becomes more of a laugher every time he speaks.
11:41 AM anonymous:
Amen. (Though I would accept continued use of “expected” as long as “George Bush” was attached to every instance. As in, “more than George Bush expected” or “less than George Bush expected.”)