Sales of new homes in the US unexpectedly dropped in December, the latest sign that government support is causing swings in the performance of the housing market.
New home sales fell by 7.6 per cent last month after falling by a revised 11.3 per cent in November, commerce department figures showed. Wall Street analysts predicted an increase.
The decline follows disappointing performances for existing home sales and home prices, which dipped after the original expiration date of the first-time homebuyer tax credit. Economists have argued that the credit, which was extended from last November to April, gave housing a false boost and ‘’stole from future demand’’.
“The hangover from the ‘end’ of the first-time homebuyer tax credit continues,” said Ian Shepherdson, chief US economist at High Frequency Economics.
Again with the “unexpectedly”…. again. Gotta hand it to these experts and analysts, though – the fact they are able to stay employed for being as wrong as they continually are is a testament to their raw survival skills.
Want to bet that 7.6% figure gets unexpectedly revised upwards once more data comes rolling in?
Of course, this article confirms what we’ve been bitching about from the beginning: these horrible demand side prop-up programs have distorted the market by spiking the demand curve to the left and have exacerbated an already bad market situation by encouraging bad risks to enter the market and bad risks to stay in the market.