Sunday, December 26, 2004

Housing starts

Been saying this since summer (here, here, and here).

[. . .]

Sales of new homes plunged 12 percent last month, the biggest drop since a 23.8 percent fall in January 1994, to a seasonally adjusted annual rate of 1.125 million units. But industry analysts played its significance down, saying applications for new mortgages still were at healthy levels.

“I would not view this report as the beginning of a significant downturn,” David Berson, chief economist for mortgage financing giant Fannie Mae in Washington.

[. . .]


However, leave us not forget that the top two nitwits at Fannie Mae have had to step down under shady circumstances, so anything that comes out of there is suspect.

Housing and mortgage refinancing have been keeping the economy moving along. That, and corporate cost-saving measures (read: layoffs and contract renegotiations). With that old nitwit Greenspan promising he'll continue to steadily raise interest rates through at least the first half of '05, look for housing starts to fall again next month, regardless of what the 'experts' say. Remember, they all, directly or indirectly, work for Bush.

A real indicator will be when they get all the holiday spending numbers sorted out. By Christmas Eve, most places weren't anywhere near their last year's totals. Well, except for high-end concerns. Seems the rich are breaking all records for spending. I guess those tax cuts are really working, huh? If the consumer confidence indexes take a hit, watch the economic forecasts also take a turn downward. At least in the reality-based world, that is.

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