About-Face: AP's Rugaber Re-evaluates Meaning of Yesterday's Existing-Homes Sales After Today's New-Home Sales Nosedive
It seems that beat reporters need to be constantly reminded that they have their hands full just discerning the facts, relaying them coherently, and leaving the "analysis" to others (while presenting alternative analytical takes when necessary).
The nagging is really for their own good. If they would stick to their jobs instead of "analyzing," which often is a cover for getting out their own opinions, they wouldn't be suffering the feelings of embarrassment Christopher Rugaber at the Associated Press, aka the Administration's Press, should be feeling right now (I'm not saying he is; I'm saying he should be). You see, yesterday he said that a best-in-years report on existing-home sales meant one thing. Today, thanks to the Census Bureau's disastrous July new-home sales release, he said it meant quite another.
Yesterday, the existing-home sales report meant that all was essentially sweetness and light:
US HOME SALES HIT 5.4M IN JULY, HIGHEST SINCE '09
For the first time since 2009, previously occupied U.S. homes are selling at a pace associated with a healthy market.
Sales jumped 6.5 percent in July to a seasonally adjusted annual rate of 5.4 million, the National Association of Realtors said Wednesday. Over the past 12 months, sales have surged 17.2 percent. The trend shows that housing remains a driving force for the economy even as mortgage rates have risen from record lows.
... Buyers last month weren't dissuaded by higher long-term mortgage rates, which have jumped, on average, a full percentage point since early May. The higher rates might have led some potential buyers to buy in July out of fear that rates will rise further.
July's report captures completed sales, which typically reflect mortgage rates that were locked in a month or two earlier. A fuller effect of higher mortgage rates might not be clear until August home sales are reported next month.
I'm pretty sure Rugaber must be thanking his lucky stars that he gave himself a way to partially back out in the final sentences of the last and second-last excerpted paragraphs. That's because just 24 hours later, after the release of today's new-home sales report, he needed one. But in the process, look how he had to change his take on the state of the existing-home situation:
US NEW-HOME SALES PLUNGE AS MORTGAGE RATES RISE
Americans cut back sharply in July on their purchases of new homes, a sign that higher mortgage rates may weigh on the housing recovery.
The Commerce Department said Friday that U.S. sales of newly built home dropped 13.4 percent to a seasonally adjusted annual rate of 394,000. That's the lowest pace in nine months. And it is down from a rate of 455,000 in June, which was revised sharply lower from a previously reported 497,000.
... The housing market has been one of the strongest performers this year in an otherwise sluggish economy, helped by steady job gains and low mortgage rates. But mortgage rates have risen a full percentage point since May and have started to steal some of the market's momentum.
... The impact of higher mortgage rates has surfaced in the new-home market faster because the July sales report reflects signed contracts. Sales of previously occupied homes reached a nearly four-year high last month. But that report measured completed sales, which typically reflects mortgage rates locked in a month or two earlier.
The jump in previously occupied home sales likely reflected a rush by home buyers to lock in lower rates. Some economists expect those sales to fall back in August.
Even so, most economists expect the housing recovery will persist. Mortgage rates remain relatively low by historical standards.
Rugaber went from "Buyers last month weren't dissuaded by higher long-term mortgage rates" to a "rush by (existing) home buyers to lock in lower rates." That is, rates went from being mostly irrelevant (with the back door that it "might not be clear until August") to a prime motivator, as well as a reason to believe that next month's existing-home sales will come in lower because the locked-in lower rates have been used up.
Keep in mind that Rugaber's report today was done at 10:39 a.m., just 39 minutes after the new-home sales release and probably about 90 minutes after he or someone else at received the news in the Census Bureau's pre-release lockup. He didn't have time to see, in light of that just-released new-home sales report, whether "Some economists expect those sales to fall back in August," or whether "most economists expect the housing recovery will persist."
Thus, the correct translations of the two quoted statements in the previous paragraph are more than likely as follows:
- "I expect those sales to fall back in August," and
- "I expect the housing recovery will persist."
If Rugaber would just keep his narratives to the facts and consult others for directly quoted for opinions and assessments, we would of course still go after him when necessary over his selection of experts and those experts' opinions. But at least he wouldn't be personally looking foolish for saying one thing one day, and something clearly quite different literally the very next.
Other reporters take note, even if the stubborn ones at AP won't.
Let's also not overlook the fact that both of Rugaber's reports failed to mention something quite germane to the housing situation, namely newly released evidence by Sentier Research noted in a Thursday evening Investor's Business Daily editorial that really confirms what already is known: Household incomes continue to lag, and are still below where they were at the end of the recession. That, in combination with higher rates, would be cause to believe that the housing recovery won't perist.
Cross-posted at BizzyBlog.com.