Today's report on February's new-home sales from the Census Bureau showed seasonally adjusted declines in three of the nation's four regions and an increase in the West.
The Associated Press and reporter Josh Boak, displaying brazenness which might have even embarrassed the scribes at Pravda during the worst days of the Soviet Union, concentrated on how great things were in the West in their headline and opening paragraph, ensuring that those who get their news from headlines and opening blurbs on their computers and mobile devices will believe that all is mostly well. Incredibly — well, it would be except that this is AP — Boak never told readers that sales actually declined in the other three Census regions.
Boak and AP gave readers the impression that there was an increase in the West and flatness, not declines, elsewhere (bolds are mine):
WESTERN US HOMEBUYERS PUSH UP SALES OF NEW HOMES IN FEBRUARY
U.S. homebuyers in the West accounted for all of February's increase in sales of new houses, possibly signaling uncertain growth prospects for the broader real estate market heading into the spring buying season.
The Commerce Department said Wednesday that new-home sales rose 2 percent last month to a seasonally adjusted annual rate of 512,000. All of the increase came from 38.5 percent surge in purchases in the West, which reversed a stiff 32.7 percent decline in January that had cut into overall sales.
Here are the actual results by region:
The table's data demonstrate that both the AP's headline and Boak's opening sentence are false.
The only reasonable way to interpret what the AP presented would be that increased sales in the West equaled or roughly equaled the nation's overall January-to-February sales increase of 10,000. Obviously, that's not the case. Instead, the West's increases more than made up for declines two of them quite steep, in the other three regions.
Again, Boak never told readers that the other regions declined.
As has been his annoying habit for several months, Boak hauled out his go-to bogus benchmark for new-home sales recovery. This month, though, he gave readers the impression that this benchmark is too high:
The market still has yet to fully rebound from the housing crisis of nearly a decade ago. New-home sales remain well below the historic 52-year average of 655,200, a figure that includes the build-out of the suburbs and influx of buyers after World War II. Subprime mortgages helped push up sales as high as 1.28 million in 2005, which in hindsight was an alarm sounding about an imbalanced, debt-ridden economy that shortly tumbled into the worst economic downturn since the Great Depression.
As I have shown repeatedly and will show again, Boak's 52-year average includes years when the U.S. population was 40 percent lower than it is now. The population-weighted average of the 45 years from 1963 to 2007 was over 900,000:
As I have observed before, it would be appropriate to adjust that average downward to account for changing demographics and the bubble years of the previous decade, leaving a reasonable benchmark of roughly 800,000. It would not be appropriate to include the results of the past eight calendar years containing the POR (Pelosi-Obama-Reid) economy, because the unprecedentedly awful economy during that period has artificially held the homebuilding industry back.
Boak wants to take his bogus benchmark of 655,200 down further because the "build-out of the suburbs" won't ever happen again, as if that matters. There would be plenty of demand for homes in the ex-urbs and for condominiums throughout the nation if only we had sane fiscal, regulatory and monetary policy in Washington.
The new-industry is about 300,000 annual units short of genuinely recovering. Pay no attention to Boak's bogus bombast.
Finally, Boak's reference to an "imbalanced, debt-ridden economy" is just a fancy way of saying, "Gosh, that Bush economy was awful, wasn't it?" The fact is that responsibility for the subprime lending and housing messes can be laid at the feet of the government-sponsored enterprises which fostered it with the help of the Clinton administration's Department of Housing and Urban Development.
The current economy is arguably far more "imbalanced" than the 2007 pre-recession economy ever was. See: student loans. See: vehicle loans. See: the nation's $19.2 trillion national debt, up from $10.6 trillion when Barack Obama took office.
Cross-posted at BizzyBlog.com.
