I know it’s just new home sales and I know it’s just one month and I know the number may be distorted due to the expiration of a tax credit and I know the stock market is shrugging it off (though the bond market is paying it more attention)—but I still can’t quite get my head around how low the annualized rate of new home sales has fallen.
In July of 2005, new home sales hit an annual rate of roughly 1.4 million units. Now, in May of 2010, we are at 300,000 units.
To those who say we need the housing market and most importantly housing prices to stabilize before a sustained economic recovery can take hold, today’s number makes one wonder when that time will truly arrive.
There are plenty of data points on housing that temper the news from today including what have been generally positive reports on housing prices from the various services that track those prices.
But with mortgage rates near all time lows and affordability (based on price over median household income) down to historic lows, one has to wonder why so few are buying a home.
Joblessness is clearly one reason and another may be a lack of financing for buyers who at another time would have easily passed muster with most banks.
Whatever the reason, if housing is the straw that stirs the economy’s drink, we’re all still going to be pretty thirsty.
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Programming note: "The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.