New home sales fall 11.3% as subsidy ends

[rfranklin]

Dec. 23, 2009, 10:00 a.m. EST
New home sales fall 11.3% as subsidy ends

WASHINGTON (MarketWatch) - Sales of new homes fell 11.3% in November to a seasonally adjusted annual rate of 355,000 as a popular tax break for first-time homeowners was set to expire, the Commerce Department estimated Wednesday. It was the lowest sales pace since April and followed months of steadier sales boosted by the tax break that was set to expire on Nov. 30. The tax credit was ultimately extended until June and expanded to include repeat buyers. November's sales were far weaker than the 421,000 expected by economists surveyed by MarketWatch. The number of unsold homes dropped 2.1% to 235,000, the lowest in 38 years.

[dmallind]

1. Lemme guess how most people on DU will process this...

..big increase in existing home sales was nothing but realtor shills' smoke and mirrors that doesn't mean shit.

...big decrease in new home sales is firm, legitimate and significant metric that accurately shows doom and gloom everywhere will not just persist but worsen.


Right?

[ixion]

3. personally, I never disputed the increase...

it isn't a far stretch to realize that home subsides, a.k.a. economic life support, would increase sales.

And it is not surprise that, once taken off life support, the market collapses.

[SemiCharmedQuark]

5. That doesn't really make sense. People have known that the subsidy was extended for months.

[ixion]

9. "as a popular tax break for first-time homeowners was set to expire"

this is the topic of the article. So it does make sense.

[DavidDvorkin]

12. DUers do seem to cheer

bad economic news and any signs of trouble for Obama and the Democrats.

Some DUers, anyway.

[SemiCharmedQuark]

2. Wasn't that subsidy expanded to March? My cousin is buying a house (closes Dec. 30)

and he's getting that subsidy.

[cbdo2007]

4. Yes - it was extended to June 2009 and also includes current homeowners now.

House sales always slow down around the holidays.

[Tansy_Gold]

10. You do mean 2010. n/t

[KharmaTrain]

6. And Whose Buying A Home In November?

Of course sales will go down once a nice subsidy goes bye bye...I'll bet many who did purchase put off doing so to take advantage of the credit, and there are reports of another subsidy on the way. I'd be more concerned if we saw a drop in March or April.

That said, the housing debt bomb is still exploding quietly all around. It's a great time to look for bargains as banks are overloaded with foreclosed houses, but you need at least 20% down to sign on the dotted line (along with squeaky clean credit). There should be even more deals on the market in the spring, but also many more who will no longer be able to afford the homes they're in or had their dreams of owning their own home shattered. Thus the housing numbers now shouldn't be confused with those of better days when almost anyone could buy.

[cbdo2007]

8. besides foreclosed homes....you can still get a great deal on many other houses out there...

Sellers are looking to sell and the media/everyone are still helping the buyers, by getting the sellers to cut large chunks off of the price.

House credits have been extended to mid 2010 but I would guess will be extended again to the end of 2010. That's what will be interesting to see is what happens with no credits in place....but I think that's why they keep extending them.

[KharmaTrain]

11. They Have To Keep Them Going

This is a parallel move...those who are buying already have homes and finding bargains on bigger and better. Not a bad thing, but it's not an indication of the real housing situation...which remains poor. But as is the case with employment and other "key indicators", the numbers are bantered around and that's what counts. Very little context is needed or wanted.

Cheers...

[AllentownJake]

7. The government is propping up the economy

The biggest doom and gloomer and the most ardent cheerleader can't deny that.

The question is what happens when the support is removed.

[Tansy_Gold]

13. Please, Jake, don't deal in reality.

Too many here can't handle it.

Because of course you're correct. "The economy" no longer exists except as a means to channel earned wealth into the hands of the upper elites. An ex-Goldmanite trades stocks and is acclaimed as "earning" $2.5B last year. What did he add to the economy? Nothing. Not a damned fucking thing. He removed $2.5B of wealth from those who did earn it, who did add to the economy.

But too many here on DU still have no clue about how "an economy" actually works. They still believe banks "create" credit and business expansion. They still believe it all flows from the top down.

They need to learn what Bernstein and Woodward learned: follow the money. Find out where it comes from. If one guy "won" $2.5B, then someone had to lose it. Who were the losers? How much choice did they have in the ultimate gamble that led to one asshole's taking home far more money than he needs or could even reasonably spend? How many working class lives have been ruined so one piece of shit can be hailed on DU as a smart investor?

That's the reality, Jake, and there are many here on DU who are as wrapped up in the status quo as the most pathetic RW boob who hates the estate tax 'cause he secretly hopes he's someday gonna be subject to it.

You and I and some others know it's not going to happen and we live our lives accordingly -- in the real world.



Peace to you and yours,

Tansy Gold

[AllentownJake]

14. We made history in 2008

That is all that matters
:sarcasm:

[Tansy_Gold]

15. Yep.

:-(

[AllentownJake]

16. Quite genius move by the elites to shut down a liberal backlash to the Bush years

I must say, looking at Open Secrets, they played their hand quite well.