Latest new home sales plunge shouldn't surprise the 'experts'
I am always somewhat amused when I read how so-called "experts" are "surprised" or "shocked" or "baffled" (lots of other expressions pop up when dealing with the economy in particular) when economic news turns out not to be what they had anticipated...even though it would seem pretty obvious to anyone with a keen observational eye that there is nothing really surprising by the latest set of statistics at all.
Take the just released government report on new home sales. They have hit a nine-month low. Apparently some analysts that had been "surveyed by Briefing.com had expected December sales of new home to hit an annual rate of 366,000." Instead, the figure was actually 342,000 last month, down 7.6 % from the previous month.
No, it is not. But nor should it be surprising, either.
While some have been hoping the extended period to qualify for a special tax credit for new home purchases, combined with still fairly low fixed-rate mortgages, would drive new housing sales, what some keep leaving out of the equation , it seems to me, is that people are still either without jobs, or unable to find jobs, or not able to get full-time jobs or are worried about losing the jobs they might currently have!
The nation's unemployment rate is not only still high, but in some states it has moved upward in just the past month or so. Hardly conducive to running out and buying a new home. Or, an existing home for that matter. Sales of those, according to the National Association of Realtors, also sank sharply for December.
It's all pretty simple when you come down to it. It's about jobs! Until there are more of them, I don't think the "experts" should be all that surprised by any of the housing figures they see.
Charles Feldman is a journalist, media consultant and co-author of the book, "No Time To Think-The Menace of Media Speed and the 24-hour News Cycle."