AP Reaction to One-Month 3.3% Seasonally Adjusted New Home Sales Increase: Housing 'Could Be Starting to Recover'
To be fair, the full text of what Martin Crutsinger at the Associated Press wrote in the first sentence of what I believe was the final version of his report today on the Census Bureau's new-home sales release was that "Americans bought more new homes last month, the latest evidence that the U.S. housing market could be starting to recover." The other "evidence" he cited related to a small bump reported earlier this week in existing home sales and one homebuilder's improved financial results.
That's pretty thin gruel from which to paint a "could be starting to recover" scenario, especially when it's expressed by someone who isn't a housing expert, i.e., an AP reporter. The only expert Crutsinger cited told him that "Housing could be a pleasant surprise this year." Wow. How profound. Let's take a look at some quotes from experts Thomson Reuters was able to find. Readers will note that the variations on word "bottom" occur quite frequently (quotes are not in the same order as they appeared at the link):
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WILLIAM LARKIN, FIXED INCOME PORTFOLIO MANAGER AT CABOT MONEY MANAGEMENT IN SALEM, MASSACHUSETTS
"Today's numbers I think are indicating that housing is definitely in the bottoming phase and benefiting from record low mortgage rates. The other part of the equation, and what we are seeing from our clients, is if you look at the lower end of the market people are taking advantage to utilize it as a source of rental income."
ANDREW GRANTHAM, ECONOMIST, CIBC WORLD MARKETS, TORONTO
"The slightly better figure reflected both a sharper rebound during the current month and some slight upward revisions to previous data. However, following a still sharp decline in March, the underlying trend in new home sales since the start of the year remains broadly flat, following the gradual uptrend towards the end of 2011. ...
SEAN INCREMONA, ECONOMIST, 4CAST LTD, NEW YORK
"The new homes sales data is much like what we saw from existing home sales yesterday. There is progress but still at a gradual pace. It is still baby steps. This increase of 343,000 still comes in below that February high, which was probably inflated by weather. It does look like we have found a bottom, which is encouraging, but it is still very slow progress at this point."
SUBODH KUMAR, CHIEF INVESTMENT STRATEGIST, SUBODH KUMAR & ASSOCIATES, TORONTO
"I don't think this adds anything new for the market at this stage because there was some indication housing was bottoming out from yesterday's (existing home sales) numbers. ...
JACOB OUBINA, SENIOR U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
"It is a little better than expected, but housing is still stuck in a rut here. Mortgage applications in the first few weeks of this month indicate we should remain around this level here, if not slightly lower.
OMER ESINER, CHIEF ANALYST, COMMONWEALTH FOREIGN EXCHANGE, WASHINGTON
"It's encouraging. These are signs that we might be forming a bottom in housing. I would disregard the price data, though. On yesterday's existing home sales data, the rise in prices was skewed by some technicalities. But it's encouraging to see the supply of homes is falling. We'll need to see housing shore up before we can talk about a meaningful recovery in the U.S."
Gosh, it has been almost three years after the recession officially ended, and at least according to Mr. Esiner, we still don't have a "meaningful recovery." Imagine that.
One of these days, probably not in my lifetime, AP is going to learn that readers don't want to know what its reporters think; they only want to know what people who know what they're talking about think, and don't want to have to wade through reporters' inexpert assessments to get to them. It's even worse when, as was the case with Crutsinger's dispatch today, there ends up being no expert who says anything meaningful.
Perhaps the reason Crutsinger only quoted one expert, and only got one superficial quote, is that he couldn't find anyone who would support his "could be starting to recover" premise. If so, that's hardly surprising.
The raw data for April show that only 33,000 homes were sold in the entire USA. That's about 20% below the 41,000 sold in April 2010 when the homebuyers credit expired (remember how that credit was going to kick-start the industry?), and barely above the 32,000 sold in April 2009. The actual number of homes for sale at the end of April was 144,000. That's the second lowest number seen in almost fifty years of recordkeeping (March 2012 was the lowest), and less than half the number which were for sale three years ago. Those quoted above who cited various versions of "bottoming out" would appear to have far more support for their assertions than non-expert Crutsinger.
Look at the bright side. Unlike Christopher Rugaber, who last week falsely claimed that "Home construction is near a three-year high," at least Crutsinger didn't try to convince us that we were seeing nearly the best new-home market in three years.
Cross-posted at BizzyBlog.com.