Today's Housing Numbers Do Not Tell Us Anything About The Economy

[AllentownJake]

Don't be fooled by the surge in existing home sales in October.

The number was far larger than expected. But the only people helped out by the sales of existing homes at low prices are real estate agents and banks collecting fees on new mortgages.

For the rest of us, the surge in existing home sales is basically a non-event. If anything, the 10.1% surge might bad news for the broader economy.

The problem goes far beyond the usual griping you will hear today. Yes, low prices, low interest rates and the tax credit all boosted sales. But if these sales were really giving the economy a boost, that would be terrific news.

Home sales can be both an indicator of economic strength and a contributor to economic growth. That is, home sales can be both a signal that the economy is recovering and a path to recovery itself. This time around, however, the home sales numbers are neither a signal nor a contributor.

http://www.businessinsider.com/todays-housing-numbers-do-not-tell-us-anything-about-the-economy-2009-11

[Teaser]

1. because AllentownJake says so

let all be silence.

[AllentownJake]

2. Actually I linked to another person's opinion

Care to dispute that?

Here is what AllentownJake thinks

1) Mortgage applications decreased to a 12 year low last month, what the hell is going on?
2) There is a point to this article, existing home sales are good for real estate agent and banks not really any other economic sector.
3) If renters are becoming buyers and no renters replace the renters commercial real estate takes another hit
4) You aren't going to get building again till existing home sales rebound, so it is good news..a step in the right direction...just not great news.

[fasttense]

3. Does this mean I can't sell my home for what it cost me to build?

I was hoping that somehow the Fed had re-inflated the housing bubble and I could sell and move. I guess I'm stuck here for another 6 years.

[AllentownJake]

4. Where do you live?

It all depends on that...if you are in certain areas, you are shit out of luck...forever.