July 02, 2010
It apparently takes a long time for news to reach Washington, or at least the Washington Post. That is the only possible conclusion that comes from reading the front page Post article on data showing very weak pending home sales in May that told readers:
“Home sales were expected to decline once the credit ended, but May’s acute drops have surprised many analysts. If the trend continues through the rest of the year, it could upend the market’s tepid rebound and undermine the broader economy.”
Actually analysts who follow housing data were not at all surprised by the sharp drop in pending home sales in May. The Mortgage Bankers Association purchase mortgage applications index had plunged after the expiration of the homebuyers tax credit at the end of April.
It is also reasonable to expect further declines in house prices since the bubble has not fully deflated. House prices are still about 15 percent above their long-term trend levels.
The Post had a policy before the bubble bursts of talking exclusively to economists who were unable to see the $8 trillion housing bubble or unwilling to talk about it. It appears to still have this policy.
Comments