Democratic Underground Latest Greatest Lobby Journals Search Options Help Login
Google

Burning Down the House By DEAN BAKER

Printer-friendly format Printer-friendly format
Printer-friendly format Email this thread to a friend
Printer-friendly format Bookmark this thread
This topic is archived.
Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU
 
Donnachaidh Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-03-10 10:32 AM
Original message
Burning Down the House By DEAN BAKER
http://www.counterpunch.org/baker09022010.html

The howls of surprised economists were everywhere last week as the government reported on Tuesday that July had the sharpest single-month plunge in existing home sales on record. The next day the Commerce Department reported that new home sales hit a post-war low in July.

All the economists who had told us that the housing market had stabilized and that prices would soon rebound looked really foolish yet again. To understand how lost these professional error-makers really are it is only necessary to know that the Mortgage Bankers Association (MBA) puts out data on mortgage applications every week. The MBA index plummeted beginning in May, immediately after the last day (April 30) for signing a house sale contract that qualified for the homebuyers tax credit.

It typically takes 6-8 weeks between when a contract is signed and a house sale closes. The plunge in applications in May meant that homebuyers were not signing contracts to buy homes. This meant that sales would plummet in July. Economists with a clue were not surprised by the July plunge in home sales.

What should be clear is that the tax credits helped to pull housing demand forward. People who might have bought in the second half of 2010 or even 2011 instead bought their home before the tax credit expired. Now that the credit has expired, there is less demand than ever, leaving the market open for another plunge in prices. The support the tax credit gave to the housing market was only temporary.

More at the link ---
Printer Friendly | Permalink |  | Top
NJmaverick Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-03-10 10:36 AM
Response to Original message
1. Stocks extend September rally after jobs report
http://news.yahoo.com/s/ap/20100903/ap_on_bi_st_ma_re/u... ;_ylt=Au0Kz0qJ6ruZ8l2Q70La_iOs0NUE;_ylu=X3oDMTFmdHUwZ3Z1BHBvcwMxMDIEc2VjA2FjY29yZGlvbl9idXNpbmVzcwRzbGsDc3RvY2tzZXh0ZW5k
Printer Friendly | Permalink |  | Top
 
xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Fri Sep-03-10 10:37 AM
Response to Original message
2. recommend
Printer Friendly | Permalink |  | Top
 
DU AdBot (1000+ posts) Click to send private message to this author Click to view 
this author's profile Click to add 
this author to your buddy list Click to add 
this author to your Ignore list Thu Jul 24th 2014, 09:13 PM
Response to Original message
Advertisements [?]
 Top

Home » Discuss » Archives » General Discussion (1/22-2007 thru 12/14/2010) Donate to DU

Powered by DCForum+ Version 1.1 Copyright 1997-2002 DCScripts.com
Software has been extensively modified by the DU administrators


Important Notices: By participating on this discussion board, visitors agree to abide by the rules outlined on our Rules page. Messages posted on the Democratic Underground Discussion Forums are the opinions of the individuals who post them, and do not necessarily represent the opinions of Democratic Underground, LLC.

Home  |  Discussion Forums  |  Journals |  Store  |  Donate

About DU  |  Contact Us  |  Privacy Policy

Got a message for Democratic Underground? Click here to send us a message.

© 2001 - 2011 Democratic Underground, LLC