There’s much more involved in today’s awful housing sale reports, but it points out a continuing flaw with efforts to jump-start the economy — they tend to delay the inevitable rather than fix the problem.
Car sales plunged after Cash for Clunkers expired. Consumers put their wallets back in their pocket after the appliance rebate program. And now home sales have gone toes up after the expiration of tax credits that were designed to get people into new homes.
The report on home sales — they’ve dropped 27 percent — was much worse than expected. How bad? The worst in 15 years.
And one analyst says we’re already in another recession. Mark Sandi made his assessement on Monday after predicting today’s housing report.
The national median price for a home is about $182,000, according to today’s report from the National Association of Realtors. The hardest-hit region was the Midwest, where home sales fell 35 percent in July. Home sales in the Midwest priced between $100,000 and $250,000 fell 46.5 percent. But sales of homes priced at over $1 million increased from a year ago in every section of the country.
Of the 20 largest metros, the drop in home sales was most pronounced in the Minneapolis area, where sales dropped by 42%.
Today in Indianapolis, Charles Evans, the president of the Federal Reserve Bank of Chicago opened the door to the “R” word.
“Although there are some signs of general economic recovery and some evidence of home-price stabilization, we are certainly not out of the woods,” Evans said.
Translation from FedSpeak: “Hang on tight.”