by Bill McBride on 6/16/2008 01:00:00 PM
Monday, June 16, 2008
Paraphrasing: The outlook is grim. Congress needs to act "urgently". Americans are losing their jobs, losing their homes, losing their home equity. We need help!!!
NAHB wants a tax credit for homebuyers. Builders no longer asking for extension of Net Operating Loss (NOL) carry forward (this was getting too much bad publicity I think).
More: "Buyers are only buying for need (like relocations), not want." People can't move up - they can't sell their homes. Note: this is why the mobility issue I discussed last week is so critical.
"Activity so slow, companies aren't hiring any teenagers this summer."
Builder confidence hits record low.
The NAHB reports that builder confidence was at 18 in June, down from 19 in May. Usually housing bottoms look like a "V"; this one will probably look more like an "L". (this refers to activity like starts and sales, but will probably also be apparent in the confidence survey).
Click on graph for larger image in new window.
Current sales activity at record low of 17.
Chief Economist David Seiders: Expects further declines in new home sales. This survey was before the major run-up in interest rates. Interest rates is another threat to the housing market.
Caroline Baum Asks (my on the fly transcript):
"We've just been through the biggest housing bubble, housing bust in history. Housing is already tax advantaged. Why do we want to artificially stimulate demand when prices are still too high?"More: Seiders still has sales at bottoming at the middle of this year. He now says risk to his forecast are to the downside - because of this HMI report and higher interest rates.
"Risk (for sales) are piling up on downside. Price erosion (for new homes) through 2009."
Seiders, June, 2008