AP's Kravitz Plays 'Let's Pretend the New-Home Market Is Recovering' Again
The Associated Press, aka the Administration's Press, and designated drone Derek Kravitz clearly haven't tired of putting smiley-faces on the ongoing, relentlessly awful conditions in the new-home market.
As shown on February 17 (at NewsBusters; at BizzyBlog), the number of single-family homes under construction is barely above its all-time low (since records have been kept), while January's figure for single-family units completed was absolutely the lowest on record. Yet Kravitz, as has been his habit, erroneously presented housing starts alone as a proxy for "construction" activity, made it appear to many typical readers that housing starts have been averaging about 500,000 per month (not per year), and pretended that the modest rise in starts "suggests builders are growing more confident that more buyers are ready to come off the sidelines." In his Friday report on new-home sales, Kravitz noted a seasonally adjusted January drop, but trumpeted a minuscule upward adjustment to fourth-quarter sales which was barely more than a rounding error:
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New-home sales dip after 4 straight monthly gains
Sales of new homes dipped in January but the final quarter of 2011 was stronger than first estimated.
The Commerce Department said Friday that new-home sales fell 0.9 percent last month to a seasonally adjusted annual rate of 321,000 homes. That followed four straight months of gains in which home sales rose 10 percent.
The gains came after the government upwardly revised October, November and December's figures. December's annual sales pace of 324,000 was the highest in a year.
Even with more sales, just 304,000 new homes were sold in 2011 - the fewest on records dating back to 1963. And new homes are selling well below the 700,000-per-year rate that economists equate with healthy markets.
Still, the pickup in sales at the end of last year coincides with other improvements in the housing market and should bolster the view that the depressed sector is starting to revive.
At the right is the raw data which forms the basis for Kravitz's first-paragraph placement of the fourth-quarter revision and its characterization as "stronger than first estimated."
You've got to be kidding me, Derek.
A whopping 2,000 more homes were sold in December (because of rounding, it could be anywhere from about 1,000 to about 3,000 more).
This is supposed to indicate that the industry is "starting to revive"? If Kravitz thinks that 23,000 is "stronger," he must want us to believe that original 21,000 was "strong."
The 304,000 homes sold last year represent 3.4% of the nation's roughly 88.6 million single-family units (attached and detached), or a turnover rate of about 290 years.
In any kind of context, characterization of any new-home sales number during the past few years as "strong" or "stronger" has to be a sick joke. It certainly has no basis in reality:
December's rip-roaring raw-number revision to 23,000 merely means that it was just as dismal as December 2010. January's raw number barely beats January 2011, and is worse than 2009 and 2010, when we were told that the market was bottoming out. Before 2009 and the Obama administration's arrival , the previous worst single-month in the recorded history of new-home sales was 23,000, which occurred in December 1966, when the country's population was about 40% lower. The historical runner-up was the 24,000 figure seen in December 1974. Since 2008, monthly sales have come in at or below 24,000 twelve different times.
Seasonally adjusted, each month in the fantasmagorical fourth quarter of 2011 trailed either 2009, 2010, or both.
There is no housing market recovery, no solid reason to believe that it is "starting to revive," and no strong reason to believe that "more buyers are ready to come off the sidelines." It getting quite tiresome watching Kravitz and the AP blow smoke up the news-consuming public's posterior.
Cross-posted at BizzyBlog.com.