In yet another sign of recovery, the National Association of Realtors says that sales of existing homes have fallen for a third straight month:
Resales of U.S. homes and condominiums fell 0.6% in February to a seasonally adjusted annual rate of 5.02 million, the lowest level in eight months, raising doubts about the durability of the housing recovery, the National Association of Realtors reported Tuesday.
Sales of existing homes have thus fallen three consecutive months, after having risen steadily through the fall in response to a federal subsidy for first-time home buyers. The tax credit has been restored and expanded to repeat buyers, but there has been no rebound in sales yet.
“The latest report adds further evidence that the extended home-buyers tax credit has so far failed to stimulate demand,” wrote Anna Piretti, an economist for BNP Paribas.
Karl Denninger provides a clue as to why no one is buying:
Let’s cut the crap – the debt channel is stuffed for consumers. Without the ability to take on more debt the American Consumer cannot continue to buy houses, cars, or anything else that they cannot pay for with current income.
Is Mr. Denninger suggesting that our entire economy is based on pulling forward demand through excessive credit lending and that we no longer have the ability to pull forward demand because the American consumer is broke and unable to take on any more debt because they can’t even pay for their existing outstanding balances?
That can’t be. And even if it were true, the government will do something and make it all better.
We’ve said it before and this is just more evidence of it.
Once the government pulls back on stimulus, subsidies and bank bailouts, the whole damn thing is coming down.
We don’t know about you, dear reader, but we’re pretty sure that something is going to hit the fan in short order.
Is it all smoke and mirrors as the evidence seems to suggest, or is this just our confirmation bias at work?
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Comments…..how short of an order?
Thanks for the great article and analysis Mac. Care to make a prediction on what you consider “short order” means? Mr. Celente predicts a currency crisis occurring this year. Other economists predict that the government’s debt bubble will start to pop within 5 years. I’ve even read that the interest paid on the debt will reach critical mass in 15 years and the government will default on it’s debt payment oblications. When gathering information and reading analysis, such as your article, I keep searching for a time frame, predicted by people with more financial expertise and information that me. Sure, no one can know the future and it is always in flux as the gov and fed try different tricks to prop up the system. So, from all of your reading and analysis what’s your best guess for when the shtf and why?
Like everyone else, I can only make incremental preps with each paycheck. If the shtf in 5 years or 1 year that will shift my priorities on what I think I’ll need to have stored by that time.
Thank for all the efforts you put into your Web site–your efforts to inform people.
What do I think? I think something REALLY BAD is just around the corner, and lots of people sense it’s there but it’s so scary and involves so many unknowns that it’s hard to acknowledge – and we’re scared. There are so many crappy things going on today in the world that could set “it” off that a timeline is hard to pin down. But the “scary thing” is there and it’s so close you can hear it breathing and growling, and I don’t think we’ll have to wait much more than a few months before we have to meet it face-to-face.
I’m so convinced that I’m planning to close out some small credit union accounts we have, and tap into a couple of other sources we’ve just been hanging on to, and put it all into our prep list and get as far along as we can before tshtf. (We’d just lose what’s in the accounts otherwise!) Wish I had a couple of years to work on it, but I really don’t think I’ve got more than a few months, if that long.
Can you believe how divided and polarized this country has gotten in the past year?????? When tshtf, there won’t be much “pulling together”!
Grannyb,
I understand the fear of something “really bad is just around the corner.” People are so angry about the bail outs, and increased debt spending, and two wars (in one the country was mislead into going to war), and no one has been held accountable or punished for all the chaos they have created while enriching themselves, and on and on. Some on the radical political fringe are trying to seize on public anger at Washington and Wall Street and draw to themselves power and wealth. They are just seizing on their opportunity for the spotlight while manipulating their followers at the same time. These people scare me because they seem to be calling for a violent overthrow of the Federal government. The nation has a lot of ills, but spirally down into a civil war would be such a tragedy. It’s hard to believe how polarized the political parties and their followers have become over the last 9 years. Each side gets caught telling outright lies to whip up their supports against the other side and they’re not even embarrassed because their followers believe them no matter what the other side says. We have to find some people that we can pull together with.
Comments…..
You people make me nervous and very scared. I wish I could go to sleep and not wake up
That’s the truth Greg! I think this country (and many others around the world) are sitting on a pointed fence rail and could topple either direction without much provocation! I’m grieved over what is happening in this country, and things like the threats to the yes-vote Congresscriters. I don’t want to see a revolution or downward spiral leading to violence, but I’m not sure we can avoid it!
Comments…..Granny, slow down you’re over reacting. The things you mention are going to happen, a down ward spiral of the economy, lots of mortgage resets on the way and people losing their homes, more and more unemployment, leading to a complete collapse and all out civil war, but these things will take time. So don’t panic you have 5-6 years to plan. Take a deep breath and plan properly, without foresight we lead a blind fate.
With respect to housing, the demographics show that the party is over, whether there is money available for mortgage loans or not. That is why home prices continue to drop like a rock, and why the US Chamber of Commerce supports the invasion of 30 million ILLEGALS. The Chamber thinks these people will soak up the inventory.Â
It doesn’t realize that they all live in one house.
Good article! Housing is down because people don’t have money anymore and can’t borrow it.
With the baby boomers beginning to retire, the decline in our standard of living is about to dreadfully accelerate. The average American peaks in spending at around 46 years old and the last baby boomer will turn 46 this year (2010.) Therefore, a major drop-off in consumer spending is coming. But more importantly, beginning this next decade, 1.5 to 2 million Americans will apply for Social Security every year until 2026, compared to only about 1/3 of that amount – per year – during the last decade. Tax receipts to the government are about to fall off a cliff because it’s the consumption of goods and services that generate revenues to the government – not imcome tax. At the same time this spending decreases government entitlement spending for Social Security, Medicare, and Medicaid is going to go through the roof. – what do you think that means? Collapse. No spendable income and more than just housing will decline. Personal financial responsibility is the only answer.