President Obama may be too busy with failed ObamaCare rollout efforts, but the media has no excuses for ignoring the latest economic news.
Existing home sales in the U.S. fell in September and prices rose at their slowest pace in five months, the latest sign higher mortgage rates — among other economic developments — easily precipitate a slow down in the housing market recovery.
The National Association of Realtors — the organization blocking reforms to the FHA before they end up like Fannie and Freddie — said on Monday existing home sales fell 1.9 percent to an annual rate of 5.29 million units. Though the media will never cover it, August’s sales pace was revised down to 5.39 million units from the previously reported 5.48 million units.
Economists polled by Reuters were off the mark on the housing sector again, as they had expected home resales to fall 2.9 percent to a 5.30 million-unit rate.
“The housing market recovery has lost a little steam which is not a surprise with the broader economy taking a bit of a step back recently. The housing market could be a little bumpy the rest of the year,” said Ryan Sweet, senior economist with Moody’s Analytics in West Chester, Pennsylvania.
The NAR said a combination of high home prices, barely rising salaries and higher mortgage rates was weighing down the sales data due to affordability, which hit a five-year low in September.
“Expected rising mortgage interest rates will further lower affordability in upcoming months,” said NAR chief economist Lawrence Yun.
The Realtors group said existing home sales had probably peaked in July and August. The drop in homes resales adds to other data that have suggested the high borrowing costs are starting to slow the housing market recovery. Overall, it is a sign that the recovery is the recovery that never was, with major economic indicators being propped up by nothing more than artificial government and monetary policy.
Contracts to buy previously owned houses declined in August for a third straight month. Confidence among homebuilders fell in October for the second consecutive month, while loans to buy a home have been in decline for the past three weeks.
Interest rates have risen sharply since May on expectations that the Federal Reserve would start cutting back on printing money to continue its monthly bond purchases this year, with the 30-year fixed mortgage rate rising a full percentage point. Economists and pundits speak of a 1 percent spike as they would have 30-years ago about a 5 percent spike, indicating an extremely fragile market.
It rose to 4.49 percent in September, the highest since July 2011, from 4.46 percent in August, according to Freddie Mac. However, mortgage rates remain low by historical standards.
The Fed surprised markets last month by sticking to its monthly $85 billion bond buying program, seeing little to no evidence of strong economic growth.
Also showing weakness in the pace of the housing market recovery, was the median price for a previously owned home rising 11.7 percent from last year to $199,200, which was the slowest pace of increase in five months.
While overall home sales rose 10.7 percent from a year ago, that increase was also the smallest in five months, and confidence in the housing market slipped with consumer confidence.
In manufacturing news, which has not been covered, the Philadelphia Federal Reserve’s gauge of manufacturing activity in the U.S. mid-Atlantic region fell to 19.8 in October from 22.3 the month prior. The reading indicates the factory sector expanded at a slower pace in October than it did in September. With only five consecutive months indicating an expansion in a sector that has shrunk under the Obama administration and the faux recovery, the data from the early index was troubling.
Not one week later, the New York state’s manufacturing sector also showed the pace of growth had slipped this month to its slowest since May.
The New York Fed’s “Empire State” general business conditions index fell to an abysmal 1.52 from a still not healthy 6.29 in September. Economists in this Reuters poll were even father off than they were in home resales, which on average had forecasted an index of 7.00.
The New York Fed said the results suggested “that conditions were little changed over the month.” A reading above zero indicates expansion, which is all these experts have been able to hold onto in five years regarding manufacturing.
The new orders index advanced to 7.75 from 2.35, but shipments dipped to 13.12 from 16.43, clouding any real good news.
Labor market conditions slowed, with the index for the number of employees dipping to 3.61 from 7.53 in September. The average employee workweek index, however, gained to 3.61 from 1.08.
The surveys of manufacturing plants in New York and Philadelphia are two of the earliest monthly guideposts to U.S. factory conditions, and they don’t look great. Coupled with housing and unemployment disappointments, it would seem taht the media has simply given up.
The same appears to be true of the Obama administration, who is continuing to deny that ObamaCare is not hurting the economy, despite widespread economic data, studies and reporting that it is.
The shutdown gave the administration a much needed break being subjected to the latest economic news, which shows jobs reports and indexes with negative data.
But for the media, the economic suffering of millions of Americans takes a back seat to a job-killing healthcare law that cannot even be implemented properly, particularly because it was the signature achievement of their “transformational” president.
