Economy Alarm: Americans Aren’t Buying Dems’ “Recovery”

President Obama Promised the Stimulus Would Address the Housing and Unemployment Crisis

“In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen — a crisis which is unraveling home ownership, the middle class, and the American Dream itself. But if we act boldly and swiftly to arrest this downward spiral, then every American will benefit…A lost home often begins with a lost job.” (“Remarks by the President On the Home Mortgage Crisis,” whitehouse.gov, 2/18/2009)

Credibility Crash: Home Sales Hit New Lows in an Unstable Economy

Homebuilder confidence dropped for the third straight month in August as the struggling economy and a flood of cheap foreclosed properties kept people from buying new homes.

The National Association of Home Builders said its monthly index of builders’ sentiment about the housing market fell to 13, the lowest reading since March 2009. The index is adjusted for seasonal factors.

Readings below 50 indicate negative sentiment about the market. The last time the index was above 50 was in April 2006.

Fewer people are buying new homes, even though prices have stabilized in the past year and those who have good credit can qualify for the lowest mortgage rates in decades. The market is struggling because jobs are scarce and credit is tight. And many analysts predict home prices are likely to drop again in the fall.

“Buyers just aren’t stepping up to the plate,” wrote Mike Larson, real estate analyst with Weiss Research. “Unless and until the job market improves, we are simply not going to get any traction in the housing market.”

Another key reading of housing activity will come Tuesday when the Commerce Department releases its report on home construction in July. Construction plunged in June to the lowest level since October.

Builders say consumers are worried about the weak recovery and job market…

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New home sales made up about 7 percent of the housing market last year. That’s down from about 15 percent before the bust.

Weak sales mean fewer jobs in the construction industry, which normally powers economic recoveries. Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes paid to local and federal authorities, according to the builders’ trade group. The impact is felt across multiple industries.

The building industry has sharply scaled back construction after the housing market bubble burst. The number of new homes up for sale in June fell 1.4 percent from a month earlier to 210,000, the lowest level in nearly 42 years. (“Homebuilder confidence falls for third month,” Associated Press, 8/17/2010)