American home builders say that the housing market is not recovering. They blame the unemployment problem, implying that there is no light at the end of the tunnel. A large number of economists believe that joblessness will rise before it falls.
“Builder confidence in the market for newly built, single-family homes held unchanged in September from the previous month’s low level of 13, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
NAHB Chief Economist David Crowe said, “Builders report that the two leading obstacles to new-home sales right now are consumer reluctance in the face of the poor job market and the large number of foreclosed properties for sale. However, we do expect that moderate improvement in the job market will help boost consumer confidence and improve conditions for new-home sales in this year’s final quarter.”
The news speaks to the heart of the issue of whether a housing recovery will proceed one in employment or whether the cause and effect will work in the other direction. The spiral is unrelentingly downward now and that means that there is no trigger to improve either situation.
There is still a concern, which grows by the day, that America may face a protracted period of recession or, perhaps, no growth. The only potential antidote to that problem is another huge government stimulus aimed directly at job creation or tax credits for housing. A more successful solution, albeit a much more difficult one, for the housing problem would be to reset the principals on some portion of the over eleven million mortgages which are underwater. Examining that many home loans and deciding which should be altered, however, is a nearly impossible task.
Douglas A. McIntyre
Top Gaining Stocks
Top Losing Stocks