At several points in 2010 (just one example: at NewsBusters; at BizzyBlog; graphic), I pointed out that despite the federal government's continued insistence that its budget deficit for fiscal 2010 was on track to come in lower than fiscal 2009, the deficit based on real spending would be, and turned out to be, higher in fiscal 2010. That's important to know, as clever year-crossing accounting entries can't change the fact that Uncle Sam's financial situation continues to worsen at an accelerating rate. Don't expect the establishment press to acknowledge this; the illusion of improvement is important to getting their propped-up president another four years.
Similarly, it may be futile to expect that establishment media outlets, especially the Associated Press, will ever report that 2010 was the worst yearby far in new home construction since World War II. That this is indeed the case was shown last month (at NewsBusters; at BizzyBlog). This post will use December 2010 data, most of which is now in, to add an exclamation point.
Yesterday, the AP's Winston Smith-like headline writers tried to pass off 2010 as bad, but not as bad as 2009. As is the case with the government's annual budget deficit, the AP's persistent prevarication in the face of drop-dead obvious facts is an attempt to make readers, listeners and viewers believe that as bad as things are, they're at least improving (with implication, of course, that our poor, put-upon president is making progress cleaning up what was supposedly George Bush's mess). Things are not getting better, and Martin Crutsinger's narrative in the related article stops just short of saying so.
Here are a few paragraphs from Crutsinger's dispatch:
2010 ends as 2nd worst year for home construction
U.S. homebuilders are coming off their two worst years in more than a half-century, and the outlook for this year is only slightly better.
Economists say it could take three more years before the industry begins building homes at a healthy rate. In the mean time, the housing downturn is dragging on the broader economy, with one-quarter of the jobs lost since the recession began in the construction field.
Builders normally help lead the economy out of a recession. Construction projects fuel growth and that leads to more hiring.
... Homebuilders broke ground on a total of 587,600 homes in 2010, just slightly better than the 554,000 started in 2009, the Commerce Department reported Wednesday Those are the lowest annual totals on records dating back to 1959.
And the pace is getting worse. The Commerce Department reported Wednesday that builders started work at a seasonally adjusted annual rate of 529,000 new homes and apartments last month. That's a drop of 4.3 percent from November and the slowest pace since October 2009.
Building permits, considered a good barometer for future activity, rose 16.7 percent in December to a seasonally adjusted annual rate of 635,000, the best pace since March.
But builders pulled more permits in California, New York and Pennsylvania ahead of code changes in 2011 — a factor that likely influenced the spike.
Now that we have 12 months of 2010 data for everything except new unit sales, it's easy to prove not only that 2010 was significantly worse than 2009, but also that the market decline since the expiration of the homebuyer's credit in April has been downright frightening (Census data sources, all not seasonally adjusted, which differ slightly from the seasonally adjusted numbers AP reported above -- permits; starts; completions; sales):
So let's see. In 2010, which the AP's headline writer said and Martin Crutsinger seemed to imply at certain points was better than 2009 in terms of "home construction":
- Buidling permits, which only lead to construction, were up slightly, at least partially and maybe entirely because of a year-end rush to beat stricter 2011 rules in certain states.
- Yes, housing starts were up, but all of the improvement over 2009, and then some, occurred during the first four months of the year.
- Units completed dropped sharply.
- New home sales, the whole reason why they get built in the first place, also fell by double digits.
As seen above, comparing May through December of 2010 to the same months in 2009 demonstrates that the new home industry is in the midst of a serious double-dip decline across the board.
If all of this doesn't convince readers that 2010 was worse than 2009, the following graphic will (link):
At the end of 2010, there were almost 13% fewer single-family homes under construction, and industrywide inventory shrank by one-sixth.
What was that about 2010 being better for "home construction" than 2009? You guys at the AP are joking, right?
In the face of the above evidence, only a fool or a deliberately fibbing propagandist would try to convince readers, listeners, and viewers that last year was better for new housing construction than 2009. Someone should ask Tom Curley at the Associated Press and other CEOs and editors at establishment media outlets who persist in promoting the myth of new home industry improvement: Which is it?
Cross-posted at BizzyBlog.com.
